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Operator: Good morning, welcome to the Rayonier Advanced Materials Inc. Fourth Quarter 2025 Earnings Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, as a reminder, this conference is being recorded. I would now like to turn the call over to your host, Mickey Walsh, Treasurer and Vice President of Investor Relations. Thank you, Mr. Walsh. You may begin. Mickey Walsh: Thank you, and good morning. Welcome again to Rayonier Advanced Materials Inc.'s Fourth Quarter 2025 Earnings Conference Call. Joining me today are Scott Sutton, our President and CEO, and Marcus Moeltner, our CFO and Senior Vice President of Finance. Last evening, we released our earnings report and accompanying presentation materials, which are available on our website at ryam.com. These materials provide key insights into our financial performance and strategic direction. During today's discussion, we may make forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. These risks are outlined in our earnings release, SEC filings, and on Slide 2 of the presentation. We will also reference certain non-GAAP financial measures to offer perspective on our operational performance. Reconciliations to the most comparable GAAP measures can be found in our presentation on Slides 21 through 24. We appreciate your participation today and your ongoing interest in Rayonier Advanced Materials Inc. I will now turn the call over to Scott. Scott Sutton: Yeah. Thanks, Mickey. Good morning, everyone, and thank you for joining us. Since stepping into this role, I have interfaced with many Rayonier Advanced Materials Inc. employees and visited every site, and I will start with three things. First, I mean, what a great team we have. I am quite lucky to have the opportunity to hold hands with the Rayonier Advanced Materials Inc. employees and make us the absolute leader in cellulose and derivatives. Second, we have exceptional capabilities and adaptability to produce the broadest portfolio of cellulose products. Third, we have urgent work to do to get out of the ditch. I am going to keep my prepared remarks focused on Slides 4 through 7. As you can see on Slide 4, our free cash flow in 2025 was negative $88 million, and we also carry plenty of high-cost debt. That combination is not sustainable. So priority one on Slide 5 is simple: deliver positive free cash flow in 2026. Every group in the company is executing on priority one as a mission-critical activity. We are not just aiming to get out of the ditch. We are aiming to exit 2026 with significant momentum with a heavy focus on execution. That brings me to priority two: assert our leadership and lift our value equation in cellulose specialties. We are making great progress. Eighty-five percent of the specialties business is now arranged at an average price increase of 18% over 2025, with expected volume loss of about 20% compared with 2025. The other 15% is still in discussion and may not be decided until the back half of this year. If we are successful in those discussions, the remaining 15% will only come at an average price increase significantly higher than the 18% level. A great characteristic of Rayonier Advanced Materials Inc. is that everyone wants to contribute to our success, and that shows up in priority number three. You should expect every business to improve EBITDA in 2026 relative to 2025 through a broad playbook of leadership initiatives, active portfolio management—in other words, leveling up and leveling down market segment categories to maximize contribution profit—and new product commercializations across the portfolio shown on Slide 6. Slide 6 shows the new product work across the company. The point is that one business does not carry the load. The point is that we have multiple levers, and we expect every business to take a step forward. We will execute our way to the outcome shown on Slide 7. The summary is every business improves EBITDA over 2025. We bridge a near-zero EBITDA first quarter as our leadership initiative kicks in, and we deliver a full-year EBITDA substantially better than 2025, along with solid positive free cash flow. And we intend to hit 2027 running hard. That is the plan, and it is what we are executing right now. Operator, please open the call for questions. Operator: Thank you. We will now open for questions. If you would like to ask a question, please press star followed by the number 1 on your telephone keypad. To withdraw any questions, please press star 1 again. Our first question comes from Daniel Harriman from Sidoti. Please go ahead. Your line is open. Daniel Harriman: Hey, guys. Good morning. Thank you for taking my questions and Scott, congratulations on the new role. I have two questions that I will start with, and then I will get back into the queue. But, Scott, setting aside the near-term noise and the stock move following last week's AIP announcement, I am curious to know what you have observed internally that gives you confidence in the company's underlying earnings power and the long-term shareholder value that the company can produce. And then as you assert leadership in cellulose specialties, how should we think about a ceiling for pricing in that market? And do you think there is a point at which higher prices could invite some competitors to add capacity over time? Scott Sutton: Yeah. Okay. Thanks a lot, Daniel. You know, great to be here. Look, I mean, you know, I think early observations are that our best opportunity really comes from the team. I mean, look, the team here is incredible. They have been able to flip to an execution model almost overnight and really drive the free cash flow that we need. I know that the team is capable of more, and you should expect to see more. I would just say the other surprise, and I mean, it is really a positive surprise, is there is more value here than I thought. And we have significant opportunity to execute on that. We are updating our forward plans. You should expect to see more details about those forward plans on our upcoming earnings calls. And, you know, those plans will be built mainly around, you know, four themes. And hopefully, we get a chance to talk more about those four themes today. I think, Daniel, that was your first question. And the second one, you know, the price increase question and how much might be too much. I actually think the best question is maybe what kind of price increase is necessary just to keep really the remaining domestic producers of cellulose specialties in business and healthy. Because if you think about it, before we have achieved this 18%—which, by the way, leaves us far, far short of reinvestment economics—but before we achieved that, if you look at the last four years, you have seen specialty sites and businesses shut down in the state of Washington. They shut down in Tennessee. They have shut down in Florida. We also permanently ceased production of dissolving wood pulp in our Temiscaming facility. So you are really left with two domestic sites, and those two sites are both Rayonier Advanced Materials Inc.'s. We have the capability to fully supply the whole domestic market, but we are not. In fact, we are kind of set up now as an export facility, and it is really because of so many subsidized imports coming in. So I guess that is a long way to say that we have got a long way to go before we get to reinvestment economics, and really encourage anybody else to expand or enter the market. Daniel Harriman: Really appreciate that color, Scott. Thanks again. Scott Sutton: Sure. Operator: Next question comes from Matthew McKellar from RBC Capital Markets. Matthew McKellar: Hi, good morning. Thanks for taking my questions. I would like to ask first, just—I mean, recognizing that the process seems to have played out before you joined the company—can you maybe provide some perspective around the recent filing that indicated you would reject a potential offer and maybe with that, speak to why you see continuing to progress as an independent company as the superior option to that offer? Thanks very much. Scott Sutton: Yeah. Yeah. I mean, hey, Matthew. Yeah. You know, I am probably not going to comment on a specific shareholder or any specific offer, except what I will say is, you know, we have plans that will deliver substantially more value. I think a good reference point for you in terms of that target is maybe my inducement agreement, so that sets a place that, you know, I think—and the team thinks—that we can get to. You are going to hear more about those plans as we are updating them in upcoming earnings calls. I know I just answered Daniel's question by saying that it would be good to talk about some of those themes today, and we have four of them. Maybe I just outline them here since it has already come up twice. But those four themes are really based on the following. Number one, we are going to have leadership initiatives where we go out and extract the most value we can from the landscape that is there. Those are going to be a lot more sophisticated than what we are doing today. We are sort of using a blunt instrument to lift value today. Those will be more specific and sophisticated. Just like, you know, we will look at nitration grade cellulose into propellants, particularly for the U.S. That may be some initiative we work on, and you should expect to hear about playbooks set up around that. The second theme is that we are going to get a lot more skilled at leveling up and down across all our product groups. And if you think about the product groups across cellulose, you know, you are familiar with them. There is acetate grade, ether grade, nitration grade, and so on, but it also includes viscose grade, fluff grade, paperboard grade as well. And we are not going to keep our specialty capacity reserved and not operating while we go out and run an initiative, nor will we run it and just push material into a leadership market. So some of those areas have a 30% market share. Some of those areas, we have a 3% market share. But we are going to run our assets all the time and go in and out of those different market areas as necessary to maximize contribution. And you can almost think of it as—like, if you watch professional golf, you can think of it as a leaderboard. You know, if you like F1, the F1 leaderboard, NASCAR leaderboard, you know, you are going to see which markets we are going in and out of move up and down that scale as we fully run our assets all the time without damaging where we have a leadership position. So in other words, in those 30% market share areas. The third theme of that plan will be around new products, new cousins of the products we have, new tweaks on those products to deliver maybe what others cannot. And then finally, the fourth theme, you know, we will have a very active idea pipeline across the whole company that always offsets inflation. So those are the main themes of the plan that you should expect to hear more about. I mean, Marcus, anything to add or— Marcus Moeltner: Yeah. Matt, one other fifth that I would add that is very complementary to the items that Scott covered is, you know, that improved performance based on execution on those themes will position Rayonier Advanced Materials Inc. for a refi to really address the capital structure and drive down our interest expense and fixed charges. So very complementary in nature and fits well. Matthew McKellar: Great. Thanks for all the commentary. Very thorough. Marcus Moeltner: Did we answer your question, Matthew? Matthew McKellar: Yeah. That was helpful and thorough. Thank you very much. Maybe next for me, and then I will jump back in the queue. Could you just touch on demand conditions and, I guess, market conditions you are seeing in a couple of CS products? Maybe first in Ethers—one of your competitors, I think, recently called out seeing increased competition from Chinese CLP producers in European markets. Are you seeing something similar? And if so, can you speak to how significant this phenomenon is and how it is affecting the market? And then second, you mentioned nitrocellulose in your previous remarks. Could you just give us a sense of what conditions in that market are like with some of the geopolitical events we are seeing? Thanks very much. Scott Sutton: Yeah. Sure. I mean, look, ether grade cellulose is challenged a bit. It is particularly challenged in Europe, but it is mainly because of the ethers coming out of China. In other words, our customers' products are under attack, and therefore, their demand for ether grade cellulose is less. But I will say, even with that, we have still been able to achieve that near 20% price increase across ethers in Europe, which I think is quite different than what others have said. Again, it is just a demonstration that these products can command more value even when there is demand pressure and even when others may have said that pricing is actually going down. I mean, that is a testament to our team, I think. The other part of that—the nitration grade cellulose—yeah, there are lots of new inquiries around that, I would say. There is lots of demand coming from domestic producers of propellants as well. I would say that is an area where we have been able to achieve more than that 18% price increase that we quoted in the prepared remarks. Matthew McKellar: Thanks very much. I will get back in queue. Operator: Our next question comes from Dmitry Silversteyn, Water Tower Research. Please go ahead. Your line is open. Dmitry Silversteyn: Good morning, gentlemen, and Scott, welcome to Rayonier Advanced Materials Inc. Quick question. There has been some discussion about—not discussion, but you announced that you are not going to be participating in the energy project in Georgia. There have been some issues with Tardis plant, as far as skipping production and getting the raw material sufficient to produce the bioethanol business there. Can you talk a little bit about your strategy for biomaterials broadly? And then maybe more specifically, how these decisions are impacting the BioNova joint venture? Scott Sutton: Yeah. Sure. Hey, Dmitry. Good to meet you. Look, I would say just broadly across biomaterials, I mean, it is an important business for us today. It is an important part of our growth story in the future. But I would just say that it is really one contributor to our growth. If you think back to the slide that we had put in the earnings deck, you see new products or new cousins across every business. And that is what you should expect to see going forward. We are going to be talking much more about an integrated model across cellulose specialties, commodities, and biomaterials that gets run under the same value creation model. And all of those items will contribute to our growth. But here, if you go back to the leveling up/leveling down—in other words, like the NASCAR leaderboard that I just talked about before—by running Tardis much more and much stronger, not only are we able to get the value we want in specialties by being able to hold out and not push volume into that leadership market, of course, we are able to access other product groups like fluff. But at the same time, that provides an increased feedstock that goes into the biomaterials business, and in particular, it goes into BioNova there. And we sell more ethanol, and we sell more ligno—lignosulfonates as well. So we are actively working on a plan to run Tardis harder, have basically a crisis management team, and we are having success in doing that. Dmitry Silversteyn: Understood. Thank you. And then the second question, to follow up on your remarks about pricing getting so low that even an 18% price increase still does not put you at reinvestment economics. There has been an antidumping case that you filed against Brazilian and North European importers. I think that has been positively decided, but it has not been adjudicated yet. So can you talk about where you think or when you think the remedies are going to come in to allow you to restore pricing in North America? Scott Sutton: Yeah. I will. And by the way, we are going down a path of restoring prices with or without the antidumping and the countervailing duties case. It is just that success in those cases would certainly help us close the remaining 15% of business likely sooner than we otherwise would, and success in those dumping cases would also make our 2027 improvement and next steps in value likely better as well. But the situation around those—and I will just start with the countervailing duties case—there is likely there will be, we believe, a preliminary determination of those duty rates later this month. So, just as a reminder, that applies to exports out of Brazil from the subsidized state-sponsored producer that has sort of taken over the North American market. So those, we believe, will come in March. The antidumping duties are applicable to both Brazil and Norway, and we believe that there will be preliminary determinations of those rates in May. And by the way, those things are stackable. In other words, the countervailing duties and the antidumping duties can stack on top of one another, as could other things around tariffs as well if they were enacted. So that is the status of the duties. Dmitry Silversteyn: Understood. Thank you very much. I will get back into the queue. Operator: Sure. Our next question comes from Daniel Harriman from Sidoti. Please go ahead. Your line is open. Daniel Harriman: Just a quick follow-up. Scott, we have talked a good amount on specialties and biomaterials. But I am curious to know, with the new product initiatives and cost actions underway within the paperboard and high-yield pulp businesses, how do you see them fitting into the company portfolio longer term? And specifically, do you still see them as potential divestiture candidates? Or is there a role for them longer term in the Rayonier Advanced Materials Inc. portfolio? Scott Sutton: Yeah. No. Thanks for the question. I would just say across all of Rayonier Advanced Materials Inc.'s portfolio, we are not selling any business, and we are not closing any assets. All of them right now are certainly sources of improvement for us, and we expect to improve them all. Both the paperboard business and the high-yield pulp business—yeah, look, they are certainly challenged, and they are still absorbing new capacity, particularly in paperboard. But we have new products there that we are being successful at commercializing. So the source of improvement in 2026 over 2025 for paperboard will be those new products. One is associated with an oil and grease board, and the other one is a foldable freezer board, all of which can carry a unique set of printing and coatings on them. So that will be the source of improvement. We expect to do more volume in paperboard as that other capacity is getting absorbed. High-yield pulp, yep, there is a lingering oversupply issue there as well, but we also have a significant new product that is under customer testing, and we have sold some trial quantities there already. And we will expect to see price start to move back up as that oversupply issue gets addressed. Daniel Harriman: Okay. Thanks again, Scott. I really appreciate it. Scott Sutton: Yep. Sure. Operator: For any additional questions, please press star followed by 1 on your telephone keypad. Our next question comes from Matthew McKellar from RBC Capital Markets. Please go ahead. Your line is open. Matthew McKellar: Hi. Thanks again for taking my questions. Scott, you made an interesting comment there about a more integrated model across CS and even biomaterials. Could you maybe expand on that a bit? I think the current segmentation has helped make clear there are products with very different margins within the business. And that segmentation maybe masked to some degree that commodity pricing is very outside your control, and maybe you need higher CS margins still to justify continued investments. And I guess, would you even make an argument that maybe the commodity side has become structurally more challenging and what that—again, that kind of would suggest CS margins need to go higher. Scott Sutton: Yeah. Sure. I mean, look, our forward model is going to be one value creation model in this area. And, you know, you look at the scale and scope of our assets. We have got to be successful on every kind of product that can come out of those assets, whether it is the seven or eight market segments that we previously classified as specialties, or whether it is the three or four segments that we previously classified as commodities, or whether it is the four or five other segments that we have called biomaterials. So we are going to be setting those assets, and we are going to be setting our market participant strategy in whatever configuration gives us the most contribution at the time. So sometimes, we are going to be running more fluff and more viscose. That is just like today. I can tell you for 2026, our highest-volume product by far is cellulose fluff. And that is because we are going through this leadership initiative, and we are able to not rush that leadership initiative, not push production out into a market where we are trying to increase the value of it. So it is serving us very well in doing that. You also heard me speak about Tardis for the biomaterials—the coproduct or the black liquor that comes off the production of the other serves as the feed for that. So we can balance all that together instead of isolating those and showing isolated results. It does not really matter what we produced. We are just going to be showing a better and better result each time. Marcus Moeltner: Yeah. And Matt, as you know, our breadth in production capability, as Scott mentioned, we can make a myriad of products. We have got a sulfite and kraft process. We have got hardwood and softwood capabilities. We are just going to look to optimize that contribution margin across our footprint while driving down absolute fixed cost. Right? We must drive down fixed costs, be profitable across the footprint, and be more— Matthew McKellar: Great. Thanks very much for that perspective. Last question for me. It was interesting to see your paperboard volumes and prices increase sequentially in Q4. Would you attribute that mostly to the introduction of the freezer board product you mentioned previously? Is there anything else we should understand about your results in that business? And then, I guess, with the recently announced closure of a competitor's SBS mill in Northern Quebec, do you see opportunities to potentially win some attractive business there that could further support results? Thanks. Scott Sutton: Yeah. I think that—and maybe Marcus has a comment more. I mean, there is some mix issue there. We were successful with the freezer board new product introduction as well, because you are speaking about the third quarter of last year compared to the fourth quarter. Marcus Moeltner: Yeah. And I will add to that, Matt. There is an element of mix as it relates to quality as well. Better productivity and better quality at the plant results in less culls, so that is going to drive your mix as well. So we have seen the plant performance better and improved. Scott Sutton: Hey, Matt. Ask your second question. Matthew McKellar: Yeah. Sure. So I guess with the closure of a competitor's SBS mill in Quebec, do you see some opportunities to win business that could further support results in that—thanks. Scott Sutton: Yeah. Okay. Thanks. I think there are opportunities. But at the same time that is going on, we are having to absorb the new capacity up in the Northeast U.S. as well. So it is sort of maybe helping offset the negative from that. Matthew McKellar: Okay. Fair enough. Thanks very much. I will turn back— Scott Sutton: Alright. Operator: And we have no further questions. I would like to turn the call back to Scott Sutton for closing remarks. Scott Sutton: Yeah. Okay. Yeah. Thanks. I mean, there are just a couple things I would like to add here at the end, maybe things that did not really come up. We did comment that we still have 15% of the expected cellulose specialties business to place, and I just wanted to relay that I think we have options for that. Clearly, the first option is to get that in the specialties area. It is mainly a shortage in the acetate area, and it is mainly a shortage in the U.S. And all I would say there is it is going to take some time to be successful, but I would hate to really be the last demand standing there, like maybe the U.S. TOE producers are going to be. It is sort of like there is a game of musical chairs and someone is going to be left standing without a chair. And we are going to see where that goes. And that is why I made my earlier comments that the remaining 15% is only going to come at a higher price increase than the 18% that we have already achieved. The other option that we have if we are not successful at getting that remaining 15% is we will run our, you know, NASCAR leaderboard strategy, and we are already practicing at that some. We will level up and level down as necessary. And we will go do some more fluff business, where we only have a 3% or 4% global market share, and we can enter that market basically without damaging the pricing profile of it. So I think that is something that did not come up, but it is important because how we manage that is important to our EBITDA profile going forward through the rest of 2026. Okay. So look, with that, I guess I will just end where we began. And I will just say, look, what a great team we have. We have a lot of value here. But we have really urgent work to do. And our priorities are really clear. Deliver positive free cash flow in 2026. We are going to assert our leadership and lift value in cellulose specialties. And we are going to improve EBITDA across every business. We are executing on that now. We intend to exit 2026 with significant momentum and hit 2027 running really hard. You should also expect us to continue to update these plans where we hinted on the four themes that they will contain, and Marcus added a fifth very important value creation theme to that as well. And that is what we will be talking about in our upcoming earnings calls. So anyway, with that, I will just say thanks a lot for your questions, and thanks a lot for your interest in Rayonier Advanced Materials Inc. Operator: And this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Good day, everyone, and welcome to The Real Brokerage Inc. Fourth Quarter and Full Year Ended December 31, 2025 Earnings Call. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Alexandra Lumpkin, Chief Legal Officer at The Real Brokerage Inc. Ma'am, the floor is yours. Alexandra Lumpkin: Thanks, and good morning. Thank you for standing by, and welcome to The Real Brokerage Inc. conference call and webcast for the fourth quarter and full year ended 12/31/2025. We appreciate everyone for joining us today. With me on the call today are Tamir Poleg, our Chairman and Chief Executive Officer; Jenna Marie Rozenblat, our Chief Operating Officer; and Ravi Jani, our Chief Financial Officer. This morning, The Real Brokerage Inc. published an earnings press release including results for the fourth quarter and full year ended 12/31/2025. The press release, along with the consolidated financial statements and related management's discussion and analysis for the full year ended 12/31/2025 have been filed with the U.S. Securities and Exchange Commission on EDGAR and with the Canadian Securities regulators on SEDAR. Before we get started, I would like to remind everyone that statements made on this conference call that are not historical facts, including statements about future time periods, may be deemed to constitute forward-looking statements. Our actual results may differ materially from these forward-looking statements, and the risk factors that could cause these differences are detailed in our Canadian continuous disclosure documents and SEC reports. The Real Brokerage Inc. disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. With that, I will now turn the call over to Chairman and Chief Executive Officer, Tamir Poleg. Tamir, please proceed. Tamir Poleg: Thank you, Alex, and good morning, everyone. 2025 was another transformational year for The Real Brokerage Inc., and our fourth quarter results provided a strong finish. In the fourth quarter, we grew closed transactions by 38% to nearly 49,000, significantly outpacing the broader existing home sales market. This volume drove revenue growth of 44% to $505 million and a 30% increase in gross profit to $39 million. Net loss narrowed to $4.2 million, while adjusted EBITDA was positive $14.2 million, a 56% year-over-year increase. Looking at the full year, revenue grew 56% to nearly $2 billion, while our gross profit growth of 44% significantly outpaced the 25% increase in operating expenses. This discipline resulted in a substantial improvement in our GAAP net loss to $8.1 million, while adjusted EBITDA reached $62.9 million, up 57% from last year. Furthermore, our model generated positive cash flow from operations of approximately $66 million, allowing us to return $39 million to shareholders through buybacks, while maintaining a debt-free balance sheet with $50 million in liquidity. We ended 2025 with 31,739 agents on our platform, up 31% year over year, and today, that number has grown to over 33,000. These results would be impressive in any environment, but are notable given the broader housing backdrop. Existing home sales remain well below long-term averages, transaction volumes across the industry remain constrained, and many market participants are waiting for macro improvement. Meanwhile, our growth continues to be driven by structural factors: a powerful agent-attraction flywheel, improving agent productivity, and ever-increasing agent engagement and retention on our platform. That distinction is important. At the same time, we continue to make steady progress expanding beyond brokerage into ancillary products and services tied to the housing ecosystem and transaction life cycle. To that end, OneReal Mortgage generated $6 million in revenue in 2025, up 50% year over year, driven by increased loan officer growth and productivity. In January, we were pleased to welcome Kate Gurovich as CEO of OneReal Mortgage and look forward to seeing accelerating growth and improved profitability under her leadership. OneReal Title generated $5 million in revenue, up 5% from 2024, as we began transitioning our model toward more scalable state-based joint ventures. Today, OneReal Title operates 13 joint ventures with operations across 17 states, and we expect to open three additional joint ventures in 2026. And RealWallet, which completed its first full year, generated nearly $900,000 of revenue with 77% gross margins, with its current run rate approximately $1.5 million. Importantly, today, more than 7,000 agents are actively using Wallet with approximately $23 million in deposits. We view Wallet not only as a revenue opportunity, but as a deeper integration point with our agents' daily financial workflows. While brokerage remains the core engine of the business, these ancillary services represent the next layer of value creation. They increase engagement and improve and expand revenue and gross margin per transaction. Over the past decade plus, we have been focused on building an integrated platform, aligning agent economics, investing in proprietary technology, and expanding our ecosystem of products and services. In 2025, we saw clear evidence that this model can scale while improving operating leverage. We are not managing a collection of disconnected tools or regional systems. We are operating one unified platform across North America. That consistency is what allows us to improve the system year after year. With that, I will turn it over to Jenna. Jenna Marie Rozenblat: Thanks, Tamir, and good morning. As Tamir noted, 2025 was another transformational year. Revenue increased 56%, gross profit increased 44%, and operating expenses increased only 25%. That operating leverage reflects the structural foundation of our business. Everything starts with Reason, which is our proprietary transaction management platform. Every transaction, every document upload, every compliance step, and every commission payout flows through that single system of record. With all 33,000 agents operating inside one platform, we benefit from standardized workflows and structured transaction data across our entire network. That unified foundation allows us to embed AI directly into live transaction workflows and deploy enhancements at scale. We are not layering standalone tools on top of fragmented systems. Instead, we are integrating intelligence into the core operating system of the brokerage. Let me give a few practical examples. First, agent productivity. LEO Copilot is our intelligent assistant embedded directly inside Reason. It provides agents real-time guidance on transaction status, commissions, next steps, and even marketing assets. Since its launch in 2023, agents have engaged with LEO over 700,000 times. It has become an essential part of their daily workflow. Second, support and compliance. Last summer, we made LEO the first line of support across email and phone. Since then, LEO has answered more than 20,000 support inquiries, or approximately 46% of total support volume. That success rate improves responsiveness for agents while reducing incremental support headcount as we scale. We also introduced LEO Voice Broker, an automated broker review to enhance compliance oversight. Automated broker review uses AI to review documents as they are uploaded, identifying missing information or inconsistencies before they reach a human broker. That reduces back and forth, shortens approval cycles, and allows brokers to focus on more complex issues rather than routine checks. Third, internal automation. Beyond agent-facing tools, we are increasingly deploying AI agents and workflow automations to replace repetitive manual tasks across brokerage operations, finance, transactions, support, and enablement. For example, we have automated significant portions of our ready-to-close transaction workflows, reducing manual intervention across a growing share of transaction types. And we have also standardized processes such as refund coordination, commission calculations, and bulk document retrieval, replacing multistep spreadsheet- and ticket-based workflows with structured, system-driven processes. While these initiatives may not be visible externally, they reduce friction, improve auditability, and prevent headcount from scaling linearly with transaction volume. Over time, these improvements compound. That is what makes the leverage durable. And last, but certainly not least, in the fourth quarter, we extended HeyLeo.com, our unified platform, to the consumer. HeyLeo is our AI-powered consumer portal where home buyers converse with intelligent agents to find their next property. This is not just a search site. It is a full AI Relationship Manager, or AIRM, that provides each of our agents with a customized web portal, a dedicated SMS phone line, and a dedicated HeyLeo email address. The power of HeyLeo lies in its Atlas skill layer. It is backed by comprehensive MLS data, 180 integrations today and a target of 400 integrations by July, and nationwide school and neighborhood insights. Whether a buyer is texting a question about a school zone or emailing about a kitchen layout, the AI provides instant data-backed responses. It can even schedule showings directly on the agent's calendar. By providing this 24/7, omnichannel engagement, we are giving our 33,000 agents a one-to-many scaling advantage. While HeyLeo remains in beta, it represents a critical link in our goal to streamline the entire transaction life cycle from the first consumer click to the final commission payout. Taken together—agent productivity, compliance, back-office efficiency, and now HeyLeo’s consumer engagement—we believe we have developed a structural advantage that is scalable, durable, and economically meaningful. I will turn it over to Ravi. Ravi Jani: Thank you, Jenna, and good morning, everyone. Our 2025 results reflect another year of significant growth and improving operating leverage, even as our results were impacted by a shift in our transaction mix. Consolidated revenue for the fourth quarter rose 44% to $505 million, contributing to full year revenue of nearly $2 billion, a 56% increase from $1.3 billion in 2024. This performance was led by our North American brokerage segment, where closed transactions increased 38% in the fourth quarter. This significantly outpaced the broader existing home sales market, which saw only a 1% increase in the same period. This performance was all organic and reflects our continued success in attracting high-producing agents and teams to The Real Brokerage Inc. platform. We also saw continued momentum in our ancillary businesses. Ancillary revenue in the fourth quarter rose 24% year over year to $3.2 million and reached $11.9 million for the full year. This includes RealWallet, which generated $339,000 in the fourth quarter, an 8x increase from its launch quarter a year ago. We believe the continued expansion of these services represents a meaningful long-term opportunity to diversify our revenue base and enhance our margin profile. Gross profit for the fourth quarter was $39 million, up 30% year over year, bringing our full year gross profit to $166 million, an increase of 44%. Our fourth quarter gross margin was 7.7% compared to 8.6% in the prior-year period, while our full-year margin was 8.4%. The year-over-year change is primarily a function of our evolving mix. In the fourth quarter, we saw a 400-basis-point increase in the proportion of transactions completed by agents who have reached their annual commission cap. While these post-cap transactions carry a lower margin for the brokerage, they are a core element supporting agent retention, evidenced by our revenue churn improving to 1.6% in the fourth quarter, down from 1.8% in the prior year. We believe maintaining a best-in-class retention profile is fundamental to our long-term competitive position. Based on our current outlook, we expect this transaction mix shift to continue in 2026; however, we anticipate margins will ultimately normalize as market activity improves and transaction growth becomes more evenly distributed across our broader agent base. Over time, we expect ancillary businesses and platform efficiencies to support further gross margin expansion. A highlight of our 2025 performance was the continued decoupling of our expense base from our revenue and gross profit growth. In the fourth quarter, operating expenses grew 22% to $44 million, while gross profit grew 30%. Operating expense in the quarter includes $750,000 related to an agreement to settle the CoinArc class action lawsuit on a nationwide basis. For the year, we limited operating expense growth to 25%, for a total of $175 million against a 44% increase in gross profit. The largest driver of our OpEx increase remains marketing—specifically revenue share and agent equity compensation—which scale directly with our transaction volume. As a percent of revenue, operating expenses improved by 160 basis points to 8.8% in the fourth quarter and by 220 basis points for the full year to 8.9%. Our adjusted operating expense, which is a non-GAAP metric that reflects our fixed cash overhead, improved to 4.3% of revenue, down from 5.7% in the prior-year period. On a unit basis, our adjusted OpEx per transaction declined 22% year over year to $440 in 2025, down from $565 in the prior year, further validating the scalability of our platform. Importantly, this operating leverage drove improvements across our profitability metrics. Operating loss improved to $5.2 million in the fourth quarter compared to $6.4 million in 2024, while full-year operating loss narrowed to $9.2 million from a loss of $25.2 million in 2024. Net loss improved to $4.2 million in the quarter and $8.1 million for the full year, compared to a net loss of $6.7 million and $26.5 million for the respective prior-year periods. Adjusted EBITDA rose 56% to $14.2 million in the fourth quarter and reached $62.9 million for the full year, a 57% year-over-year increase from 2024. The Real Brokerage Inc. generated $66 million in cash flow from operating activities for the full year and returned $39 million to shareholders via share repurchases, including $15 million in the fourth quarter. We ended the year with $49.9 million in unrestricted cash and investments, and we continue to carry no debt. Our capital allocation strategy remains disciplined, focused on maintaining ample liquidity to fund our organic growth while retaining the flexibility to return capital to shareholders and evaluate strategic M&A. Regarding our outlook, we are not providing formal guidance at this time. In the near term, as others in the industry have noted, January and February saw an unseasonably slow start to the year. Volatile weather and historic snowstorms across much of the country impacted transaction velocity during the first two months. Consequently, we expect Q1 revenue, operating loss, and adjusted EBITDA to decline sequentially from Q4 2025 levels. However, on a full-year basis, we expect the fundamental trends of organic growth significantly outpacing the broader industry to persist. We also remain confident in our ability to drive revenue and gross profit growth at a faster rate than operating expenses, which should result in year-over-year improvements in both GAAP and non-GAAP profitability metrics for the full year 2026. More details on our results and key operating metrics can be found in the earnings press release and investor presentation that accompany this call. I will now turn it back to Tamir. Tamir Poleg: Thank you, Ravi, and thank you, Jenna. Let me close with a broader perspective on the business we are building. Real estate is among the world's largest and most complex asset classes. A single transaction involves a convergence of buyers, sellers, agents, lenders, attorneys, regulators, and multiple sources of capital. It often involves leverage and requires compliance that varies across jurisdictions. And for most consumers, it happens only a handful of times in their lives. That combination—high value, high complexity, and low frequency—makes trust and infrastructure critically important. When we started The Real Brokerage Inc., our goal was not to build a better brokerage. It was to reinvent the model entirely—economically, technologically, and culturally. Traditional firms were built on physical infrastructure and overhead, with technology as an afterthought. We chose a different path. We aligned our economics with agents, built a unified system for the entire transaction life cycle, and we focused on culture by treating our agents as long-term partners. The brokerage was our starting point, but the platform is our destination. Our platform today encompasses a massive funnel of high-value transactions. By building a platform that productive agents never want to leave, we earn the right to serve them more deeply across mortgage, title, fintech services, and now consumer engagement. These are not opportunistic add-ons. They are integrated components of our flywheel: attract productive agents, process transactions with unmatched efficiency, improve infrastructure with every deal, retain through alignment and value, and ultimately capture more of the transaction life cycle as the ecosystem matures. What makes this model resilient is not just our code, but the compounding advantages of a scaled network, years of platform development localized down to the municipality level, and the massive volume of structured data we capture with every transaction. In 2025, we proved the model. We reached nearly $2 billion in revenue and over 185,000 transactions, all while generating meaningful cash flow, achieving our first quarter of GAAP profitability, and strengthening our balance sheet in a constrained housing environment. We cannot control the macro environment, but we can control our vision, our execution, and our discipline. We believe the opportunity ahead remains significant. Thank you to our agents, employees, and partners for your belief in The Real Brokerage Inc. We are still in the early innings, and we are building this to endure. Operator: Thank you. We will now open for questions. If you have any questions or comments, please press 1 on your phone at this time. We do ask that while posing your question, please pick up your handset if you are listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press 1 on your phone. Your first question is coming from Stephen Sheldon from William Blair. Your line is live. Stephen Sheldon: Hey, thanks. Good morning. First, I think I have probably asked this most times. I just wanted to ask about the agent recruiting environment and pipeline. There are a lot of changes in the industry, especially with the Compass-Anywhere merger. So are you seeing that create any more opportunity to attract agents, and are you seeing any pickup in agent interest to join since you announced some of the AI initiatives late 2025? Tamir Poleg: Hi, Stephen. There are a lot of moving parts right now in the industry and a lot of uncertainty for many agents. I think that when it comes to us, we still have a very strong pipeline. We have not tried to be opportunistic with approaching teams or agents that were part of some mergers in the industry. We believe in our value and believe that we should not rely on just occasions in the industry in order to attract agents. So the pipeline is strong. We think that there is an opportunity to double down even more on agent attraction, and in the coming weeks, we will announce some exciting things around that. We also think that the technology that we will be introducing later this year will help us attract agents even at a faster pace. So we are still very optimistic about our ability to continue and grow the way we have been in recent years. Stephen Sheldon: Got it. Good to hear. And then a follow-up on the title side, great to hear that you have more states opening. It sounds like three more on top of the current 13. How should we be thinking about the trajectory of title in 2026, especially as you move past the headwind from switching from team- to state-based JVs? Tamir Poleg: Sure. So 2025 was a transition year. We did a change in leadership at the beginning of 2025, and then we transitioned from team-based JVs to state-based JVs, and now we are starting to see the fruits of that labor. We are also doubling down on focusing on non-teams or any agent with 10 to 20 transactions within those 13 states. So we think that in the coming month and couple of quarters, we will see a significant movement. We are not happy with the performance in 2025. We understand that it was a transition year, but it is time for us to start seeing the signals of that growth. So it takes time, but I think that we have the right model and the right leadership in place, and we will start seeing the signs later this year. Stephen Sheldon: Good to hear. Thank you. Operator: Thank you. Your next question is coming from Naved Ahmad Khan from B. Riley. Your line is live. Naved Ahmad Khan: Great. Thank you very much. So, two questions from me. Maybe one just building on the title. Can you maybe quantify the drag from the transition that you had in the fourth quarter from transitioning from the old structure to the state-level JVs? And then I think on the last earnings, you had shared some data points about the attach rate that you were seeing in some of these markets that are transitioning over. Can you maybe share some color on how these are progressing? Are you seeing continued improvement in attach rate where markets have transitioned over? And the second question I had was on mortgage. Now you have more than, I guess, more than 100 loan officers, and you also introduced the consumer-facing video to help with driving attach for mortgage. What are the early results from these initiatives that you are seeing? Thank you. Tamir Poleg: Thank you, Naved. So on title, the attach rates that we have been seeing in the past couple of months are between 30% to 40% within the JVs. We want to see those percentages grow even further, and we also think that there is potential to expand those JVs and invite more agents and focus on the highest-producing agents, and those are efforts that are taking place right now. It takes a little bit of time to have those conversations with the agents and teams and get them signed up, and then earn their deals and move from there. This is why it is taking a little bit of time. But we would like to see the attach rates go beyond where they are right now in the short term. On mortgage, as you know, we brought in Kate as the new CEO of OneReal Mortgage a month and a half ago. We have a very strong pipeline of productive agents that are in the process of getting licensed as loan officers and, obviously, they will be a part of our loan officer base. So I think that within a couple of months, when they ramp up and start sending their deals, we will see an uptick in mortgage. We are very happy with the impact of Kate’s actions so far, and I think that they will have a very positive effect on revenue later on this year. So I think that mortgage is really on the right track. When it comes to LEO, what we are now doing is trying to experiment with AI technology that helps our agents nurture and convert leads in the background without them doing too much. And we think that will also help us drive mortgage and title. It is still in the early days. It is alpha tests, but it is showing very promising signs. So I am very optimistic about our ability to attach ancillary services through technology, and I think that LEO will become an integral and essential part of a transaction for many of our agents in the very near future. Naved Ahmad Khan: Okay. And then can you maybe just quantify the drag from the transition in the title side, moving from entity- to state-level JVs? Ravi Jani: Sorry, I can take that one. It was similar to last quarter. It was in the neighborhood of a couple hundred thousand dollars of revenue from JVs that existed in the prior year that were wound down and have not ramped back up. And importantly, on the point of how we expect title to grow throughout the year, we would expect to see growth reaccelerate as we lap some of those transitions. So we should be back to double-digit and solid double-digit growth as the year progresses. Jenna Marie Rozenblat: Excellent. Thank you. Naved Ahmad Khan: Thank you. Operator: Your next question is coming from Matthew Erdner from JonesTrading. Your line is live. Matthew Erdner: Hey, good morning. Thanks for taking the question. I know you touched a little bit on the capped agents and the roughly 400-basis-point increase. Where do you expect margins to normalize once we work through, call it, the slug of the market where a lot of the capped agents are winning transactions? Ravi Jani: Thanks, Matt, for the question. I think we are at a point where, while we expect this mix shift to probably continue in the first half, as we get into the second half of the year, some of the fee model changes we announced last year start to manifest, and we start to see ancillary reaccelerate, we should be at a point where we are seeing less or no drag on margins as we get to the second half. But just given where we ended 2025 and entered 2026, we expect to see this mix shift dynamic in the first half, and then that should level off. And I think the important thing to keep in mind is that while we are focused on the margin rate, we are also focused on the gross profit dollars and our ability to grow the gross profit dollars faster than we grow OpEx, which we proved throughout 2025. And so we are mindful of the margin, and we have taken corrective action on that front. But importantly, we are controlling what we can control on the fixed OpEx side as well, and so that should translate to improved bottom line. Matthew Erdner: Got it. That is helpful there. And then last one for me, I will keep it short here. What are you looking for in terms of greater adoption on the Wallet side and growing that overall deposit base? Tamir Poleg: It is a combination of a couple of things. We have about 7,000 agents on the Wallet, and we want to see more agents utilizing Wallet. We think that there are ways to push agents to adopt Wallet even further, and we are contemplating those actions. We will probably see them later on this year. At the same time, one of the biggest drivers of revenue to Wallet is Real Capital, and Real Capital expands to more and more states. I think that we are currently in 20 or 21 states, so we still have a long way to go there. As we see more states opening up and more agents having lines of credit available to them, we will see more revenue driving into Wallet. Matthew Erdner: Got it. That makes sense. Thank you. Operator: Thank you. Thanks, Matt. Thank you. And once again, everyone, if you have any questions or comments, please press star then 1 on your phone. Your next question is coming from Nick McAndrew from Zelman. Your line is live. Nick McAndrew: Hey, thanks. My questions—maybe one on the churn side of things to start. I think agent churn has improved pretty dramatically in just the back half of the year to the mid-single digits. I am wondering how much of that is attributable to ancillary products like RealWallet and maybe the credit lines that are creating switching costs for agents versus how much of this is simply better agent quality coming in the door? Thank you. Tamir Poleg: Thank you, Nick. It is a good question, and I think that our performance on agent retention is especially remarkable given all of the dynamics in the market and the fact that agents are really hurting right now. I think that everything that we release—LEO, Wallet, all of the features, all of the technology that we offer agents—adds an incremental way to value the platform. So the more services we offer, the harder it gets to leave the platform. Obviously, if you have a line of credit from The Real Brokerage Inc., it is really difficult to give that up. If you have LEO available to you, and you can ask questions and get immediate answers and get all of your files reviewed within seconds, it is really difficult to step away from that. So I think that all of those just add up to a platform that is really, really attractive for agents. Nick McAndrew: Thanks, Tamir. That is helpful. And maybe following up on that, I think there has been some level of multiple compression in a lot of software names across the space that has been driven by concerns around agentic AI disruption. I am curious if you can reiterate how you think about the tech stack relative to peers. But even more broadly, as AI tools become increasingly accessible, is there any risk that agents start building or adopting their own tools independently, or do you view all of these agentic AI developments as just a net opportunity for The Real Brokerage Inc. platform? Tamir Poleg: Obviously, we see that as an opportunity. And if you look at our financial performance, you can see that the numbers speak for themselves. At the same time, we also see a huge opportunity in the implementation of AI and the fact that a lot of the things that agents do can be helped with AI. I do not think that agents can figure all of that on their own. I think that it is important to have an integrated system where all of the information is in one place, and AI has access to all of your documents, all of your past performance, all of your financials, all of your conversations. It makes the AI substantially more efficient. And this is what we are trying to build. I think that agents on their own will never have the ability to build something as powerful as what we are building for them. So for us, we will continue to invest, and we just want to create an unfair advantage for agents, and it is starting to happen these days. Alexandra Lumpkin: Alright. Well, thanks for the question, Nick. Now that we have concluded the analyst portion of the call, Matthew, are there any more questions in the queue? Operator: Certainly. There are no further questions in the queue. Ravi Jani: Great. Well, now that we have concluded the analyst portion of the call, we wanted to address some of the questions we received from shareholders on the SAIT Technologies Q&A portal that was opened last week. We received a number of excellent questions, and so thank you to all who participated. First question for Tamir: When do you expect The Real Brokerage Inc. to turn a profit, and is there anything shareholders can do to help The Real Brokerage Inc. become profitable? Tamir Poleg: Thank you for the question. It is important to understand that for a company with our growth profile and capital efficiency, profitability is largely a strategic choice. Many of our peers are currently posting much steeper losses despite having significantly larger agent bases, which we believe validates the superior efficiency of our model. To give some context, our largest segment, North American brokerage, was nearly breakeven in the full year of 2025. The significant majority of our consolidated loss currently reflects our ancillary businesses, where we are deliberately choosing to invest today because we believe the long-term returns will be substantial. As for what shareholders can do to help, the most direct way to support our path to profitability is to engage with our ecosystem. If you are buying or selling a home, work with a Real agent, utilize a OneReal Mortgage loan officer, and choose OneReal Title for your escrow and title services. Increasing the attach rates of these services directly fuels our highest-margin revenue streams and significantly accelerates our timeline to consolidated profitability. Ravi Jani: Thanks, Tamir. The next shareholder question is: Do you anticipate stock-based compensation to continue to scale at around the same pace as cash flow, or will it level out or decrease at some point? I appreciate the opportunity to clarify our approach to equity. First, it is important to note that nearly all of our agents’ equity awards are tied directly to production, and so we do not write large upfront checks or offer guaranteed signing bonuses. Equity is primarily earned only when a transaction closes or an agent reaches their production-based milestone, such as hitting their annual cap or achieving Elite status. And we are already seeing some natural leverage in the model as we scaled. In the fourth quarter specifically, stock-based compensation as a percentage of revenue declined by 80 basis points year over year. As we continue to grow revenue and gross profit faster than our fixed headcount, we would expect this leverage to continue, reducing stock-based compensation both as a percentage of sales and free cash flow over time. You have seen that over the past few years. With all that said, we remain highly mindful of dilution, which is why we have a buyback program in place to offset it. And given where our stock is currently trading, we are pleased to be in a position where we have excess cash available to repurchase shares. Ravi Jani: Last shareholder question for Tamir: Can you talk about the growth in RealWallet and revenue growth specifically? How has it trended since the product launched? Tamir Poleg: Sure. RealWallet has been a standout success story for us. The business generated around $900,000 in 2025, and it is currently generating annualized revenue of over $1.5 million, which continues to grow on a month-over-month basis. We now have over 7,000 agents utilizing Wallet, as I mentioned, with our total deposit balance growing to over $23 million. On the lending front, we have extended over $8 million in lines of credit, and notably, our U.S. balances now exceed those in Canada. Beyond being an attractive high-margin revenue line, Wallet serves as a unique value proposition and a powerful retention tool that deepens our relationship with our most productive agents. Ravi Jani: Great. Well, that concludes the retail shareholder Q&A. If you have any more questions on today’s earnings release, please feel free to contact me and our Investor Relations team. Matthew, would you please give the conference call replay instructions once again and close the call? Thank you. Operator: Certainly. Ladies and gentlemen, today’s call will be available for replay. The replay phone numbers are (877) 481-4010 or (919) 882-2331. The replay code is 53464. And once again, the replay phone numbers are (877) 481-4010 or (919) 882-2331, and the replay code is 53464. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.
Mateo Toro: [Audio Gap] earnings call. [Operator Instructions] Next slide, please. We are pleased to be joined today by Gabriel Melguizo, Interim President of ISA; Jaime Falquez VP of Corporate Finance, Sonia Abuchar, VP of Legal Affairs; Patricia Castano, VP of Corporate Strategy; Natalia Pineda, VP of Road Concessions and Juliana Suso, VP of Institutional Relations; and Alejandro Velasquez, Director of Mergers and Acquisitions. The call begins with Gabriel's review of the highlights of 2025. Then followed by Jaime Falquez's presentation of the financial results. And lastly, we'll go back to Gabriel, who will provide closing remarks and lead the Q&A session. Next slide, please. And before we begin with Gabriel, we'd like to give the floor to Sonia, VP of Legal Affairs, who has an important announcement. Sonia Abuchar Alemán: Thank you, Mateo. Before we begin our earnings call, we'd like to address recent events related to the company's presidency. As everybody knows, last Friday, February 27, ISA was formally notified. Our decision issued by the fifth section of the State Council, which declared the annulment of the election about Jorge Andrés Carrillo Cardoso as President of the company. In response to these events and out of respect for the decisions adopted by the judicial authorities, that same Friday, in an extraordinary session, the Board of Directors resolved that. First, as of that same day, Jorge Andrés Carrillo Cardoso, ceased to perform the duties of President and Legal Representative of the company. Two, with the vote of the majority of its members, the Board decided to temporarily suspend Jorge Carrillo's employment contract until the ruling issued by the fifth section of the State Council, declaring the annulment of his election becomes final. Third, once the State Council's decision becomes final, his employment contract will be terminated. Lastly, unanimously, the Board of Directors appointed Gabriel Jaime Melguizo Posada, VP Power Transmission as the interim president until a permanent president is named. Lastly, we reiterate to the market at ISA maintains absolute operational and strategic stability. We have rigorously responded to the court rulings, ensuring continuity in leadership and immediately activating the corresponding protocols. The company continues to execute its ISA 2040 Strategy as usual, backed by a sound management team, over 5,000 dedicated employees and intact financial and operational fundamentals. ISA continues to fulfill its commitments. In every country where it operates, our focus remains the same, excellence, transparency and sustained value creation for our shareholders. Thank you. And now let's look at the next slide, Mateo please. We have now Gabriel Melguizo, who will begin talking about the results. Gabriel Melguizo Posada: Thank you, Sonia. Good morning, everyone, and thank you for joining us today. Let's look at the highlights of the year, next. Next slide, please. When we ended 2025 -- well, first, let's talk about the strategy, which is extremely important. So by the end of 2024, we have a new strategy for ISA for a term until 2040, because we anticipated the results of the prior strategy, as you know. At early 2025, we launched a new ISA 2040 Strategy to different stakeholders' interest. First, consolidating energy transmission. Second, deploying and accelerating new energy businesses. Third, growing selectively and strategically in roads then entering new geographies within America, multiplying by more than twice '24 EBITDA, actively managing the portfolio. Lastly, positively contributing to talent, communities in nature. Next slide, please. Now let's talk about operational efficiencies in 2025, we implemented several changes to be better positioned when it comes to the new strategy. And it was not only to enhance the operational efficiencies, but also the reliability of our grid, especially that of Colombia, and the contribution to energy transition. So we chose Transelca, our subsidiary in the Atlantic Coast to drive the new energy solutions business. And with this, we aim to enhance the segment of new energy solutions with solar farms for large consumers into storage energy, a field with huge potential in the region. We also consolidated the energy transmission business of ISA and Intercolombia, which allows us to focus and consolidate in a single subsidiary, our capabilities and technical experience, driving the best operation practices at a high level in Colombia. So with these changes, Transelca is still the owner of its transmission assets, while Intercolombia assume the construction, administration, operation and maintenance of these assets. By the end of the year, we created the digital hub, a platform that centralized and optimized cross-sectional services and digital services for all of our companies in Latin America. Next slide, please. When it comes to the operational performance, it was sound in 2025, where we created value for investors. We executed COP 6.3 trillion in investments, up 31% compared to 2024. Ahead, I'll be telling you more about this. We created an EBITDA of COP 8.7 trillion, a net profit of COP 2.4 trillion, and a return on equity close to 14%. We paid dividends for a total of COP 1.4 trillion, which mean COP 1,265 per stock. The stock had a positive performance with an increase of the price of 48% in the year. Also, if we keep in mind the dividend paid, the total return of the stock was 55% in 2025. And we closed the financial part of the Panamericana Este route in Panama for $281 ensuring enough resources to execute the project, next. Next. Moving to sustainability. We'd like to highlight several milestones that we reached. First, we invested COP 28 billion on social management. Also, we ended the year with an escrow indicator with 415, meaning that for every peso invested in social management, COP 415 were generated in social, environmental and economic value. Also, we declared our decarbonization path towards net zero. And in the year, we met 114% of the goal, and 100% of our companies are neutral carbon. Also, we obtained $6.8 million in revenue and $500,000 and reduction of costs from an innovation such as the use of technologies that optimize the capacity of the existing grid, the integration of data for decision-making and 3D solutions, among others. And we end this chapter with great news. ISA scored 85 of 100 points in the Dow Jones Sustainability Index, ranking among the 15 best companies of the public services power energy industry. And this allowed us to be in the S&P, and to be one of the 10% best companies of this industry. Next. When it comes to projects that are energized and awarded, in 2025, we won projects with investments close to $283 million, and we put into operation projects with a CapEx of $664 million. Among the projects awarded, 94 are for reinforcements in Brazil, a contract of connection and two expansions of the grid in Colombia. The news control of flow system of Las Palmas center in Chile, and we have a free flow agreement in Maipo, Chile. Of the project that we have in Brazil. In Brazil, we include 54 reinforcements and improvements of the grid, and the energization of the Riacho Grande project. The first block of the Piraquê project and the Água Vermelha project. All of these projects are very significant in CapEx and contributions to energy transition, and to grid's reliability. I'd like to highlight that these projects were commissioned before term. This means efficiency since we began to receive revenue before what we agreed. In Colombia, we have the Copey-Cuestecitas put into operation. A project in the north of the country with an investment of COP 147 million. Also in Colombia, we energized two connections to solar farms plus two renovations into expansions. And in Peru, we have the commissioning of the Chilota San Gabriel transmission line with investment of $7 million and the expansion [ 21 ] with a CapEx of $13 million. Next slide. In the fourth quarter of 2025, investments were executed for COP 1.9 trillion, reaching investments of COP 6.3 trillion in 2025. This figure represents an annual growth of 31%, compared to 2024, coherent with our commitments of investment and the strategy to maintain a relevance in the region. The figure in the middle shows the distribution of CapEx consolidated by geography, while the one on the right, distribution per business segment. In 2025, 92% of investments were in the energy transmission business, 7% in roads and 1% in telecommunications. Now let's look by country. In Colombia, Colombia represented 19% of total investments of ISA, which rose to COP 1.2 trillion. Investments in Colombia enabled the commissioning of projects like Copey-Cuestecitas, the connections of the solar farm Guayepo III and the Valledupar I, II, and II solar farm in the Caribbean. In addition, in Colombia, ISA still advances to build 7 projects awarded by per connection and 12 renewal and expansion projects of installed capacity. Let's look at Brazil. This represented 58% of investments for COP 3.6 trillion. In the year, ISA Energia Brazil put into operation 54 reinforcements and improvements of the grid, energize the Riacho Grande project with an investment close to COP 641 billion. The Água Vermelha project with an investment of $61 billion and the Block 1 of the Piraquê projects, which is 30% of the annual revenue. We have also 4 projects in construction, including the completion of the Piraquê project and 183 projects of reinforcements and improvements. Now let's move to Chile, which represented 12% of investments made for COP 764 billion. In Energy Transmission, with the commissioning of the increased capacity of the Maitencillo - Nueva Maitencillo line and we invest to build 2 projects and 3 expansions and renewals of the grid. When it comes to the roads, we still advance in the Orbital Sur Santiago project and complementary works. Moving on to Peru. There, we executed 8% of the investments for COP 468 billion. In the year, we enabled the commissioning of the transmission line, Chilota-San Gabriel, with an investment close to COP 100 billion and the Expansion 21 project with an investment of COP 49 billion. We also advanced to build 4 projects awarded into expansions of the grid. Moving on to Panama and Bolivia, which represented 3% of investments. These rose to COP 189 billion, mainly for the construction of the Panamericana Este route. Next slide. At the end of 2025, the investments plan from 2026 to 2030 rose to COP 25.5 trillion. On the left, we see the distribution by geography and by business segment. Investments consist of commitments of investments in bids awarded in each of the countries where we operate, projection of investments in energy solutions, optimizations, reinforcements of the grid of ISA Energia Brazil, and others. On the right, you can see the annual projections estimated of the execution of these investments. Today, we advanced in the construction of 29 projects. That is 26 projects of energy transmission and 3 in roads, which will add close to 5,000 kilometers of line and interventions of 296 kilometers of roads. So with this, I end. Now let's give the floor to Jaime Falquez, who will talk about the financial results. Next slide, please. Jaime Falquez: Thank you, Gabriel. Next slide, please. So we begin this financial chapter. Of course, I'd like to thank you all for attending and joining us today in this presentation, our earnings call of 2025, which is so important to us. And we'd like to highlight a sound operating performance. Keeping in mind, of course, that we had special events that impacted the comparison of financial figures from 2024 to 2025. When it comes to 2024, we had favorable events that had a positive impact on the results such as the regular tariff revision in Brazil, which had a net positive impact on the EBITDA of COP 872 billion, and the net profit of ISA for COP 206 billion. Also in 2024, we had a positive effect, special because of the adjustment, the estimate of reserve for major maintenance, which created a higher EBITDA of COP 177 billion. These special results of 2024 are compared with several unfavorable events in 2025, such as Brazil, ANEEL, the regulator decided to reconsider the formula to update the financial component of the basic grid of the existing system. And this had a negative impact of the EBITDA on COP 592 billion, and the net of ISA of COP 140 billion. In addition, in 2025, we keep on updating the reserve for the no payment of Air-e, which accumulated in the year 2025, COP 314 billion with a direct effect on the results of the year. As Gabriel mentioned, we're still increasing our investment pace to honor our commitments by 2030. And with that to advance in the path of our 2040 Strategy, reaching a total execution of COP 6.3 trillion, which is a historical execution representing an increase of 31% of the pace of execution of our investments compared to the year before. In terms of debt, we have sound debt levels within the ranks suggested for investment degree that gross debt EBITDA indicator closed at 3.7x. And in terms of financing, we had disbursements for COP 4.4 trillion and amortizations, or compliance of obligations of COP 2.8 trillion. Alongside, we kept our investment degree as an international issue and the highest score in local markets. Before we end this first part, I'd like to highlight also that we were given 2 recognitions. The renewal of our -- as an IR granted by the Colombian Stock Exchange, which has given to companies that adopt the best practices and transparency and information. And we were also burst in the ALAS20 ranking and which is an initiative -- independent initiative that rates a recognized annually companies for their excellence in disclosure of information. Next slide, please. When we look at the financial results on this slide, we'd like to share with you. The EBITDA and the net profit and their performance in the year 2025. At the top, we see the EBITDA was set at COP 8.7 trillion, down 11% compared to the same period displayed in 2024. If we focus in the middle of the graph, you can see the operational performance. And if we exclude the special events, the positive ones we had in '24 and the negative ones in 2025 that I just mentioned, we can see that the EBITDA grew 8%, compared to the same period, explained by the commissioning of products that generated new revenue. And the positive effect of the contractual escalators with which we update the revenue in each geography and higher yields in road concessions. When it comes to the distribution of the EBITDA accumulated by segment, 83% comes from -- or is generated from electric energy transmission, 15% roads and 2% telecommunications. Moving on to net profit, you can see that the revenue of the year added up to COP 2.4 trillion, down 14%, compared to what we've seen in the year before. But if we exclude the special events, the net profit because of the operation, would reach an increase of 5% because of the higher EBITDA and partially counteracted by a higher income tax, more minority interests and higher financial expenditures to finance the growth that we have been talking about. On the bottom right of the slide, you can see the distribution of the net profit per country. I'd like to close this slide, repeating that our operations are doing very well. That we're still energizing projects. We're creating new revenue and we're benefiting from contractual scalers, which also provide the natural coverage on our balance sheet. Next slide, please. The balance sheet at the end of 2025, we really reflects our sound financial situation. Assets, COP 76.1 billion, with a slight decrease, compared to the year before and mainly explained by the conversion effect. Here, it's important to highlight that the Colombian peso had -- was strengthened in 2025, compared to the other currencies of the region and the dollar and this is reflected when we consolidated everything to pesos. This reduction was also partially compensated by the construction of the projects and the higher yields that we have from the concessions. When it comes to liabilities, this decreased 1.9% compared to 2024, mainly also because of the effect of the conversion and compensated also by the higher financial liabilities that come from the debt that we have taken to finance are new projects. When it comes to the equity of ISA at the end of 2025, it was COP 17.8 billion, showing a stable performance, compared to December 2024. And the main movements of this item have to do with the debit that's decreed. And by the shareholders that same year. Next slide, please. So we can talk about the debt. In 2025, the financial debt -- consolidated financial debt closed at COP 34 billion, that is 1.7% lower than at the end of 2024. The net movement of the debt is mainly explained by the conversion effect. The amortizations according to the time tables of payments, the issue of debentures in Brazil and Peru. And disbursements that are made for our investments plan. The main operations of debt during the year focused in Brazil with the issue of debentures, which is very much bonds for COP 2.8 billion, destined to cover the investments planned and especially the development of the project, Piraquê and Serra Dourada, as well as the prepayment of the 12th issue of debentures with which we also improved the company's debt profile for the end of the year. In Colombia, ISA received disbursements for COP 650 trillion to finance the investments plan in Peru. There are local bonds issued made by ISA Peru, the first one made by this company in the local market, for an equivalent of COP 232 billion, with which we will refinance the total of its bank debt that it had last year. We also had loan disbursements in ISA REP and Consorcio Transmantaro in the last quarter to finance investments in projects for a total amount of COP 164 billion. Lastly, ISA vs Chile received the disbursement of a bank loan for COP 405 billion for -- mainly for the works of the project of the Dourada and Panamericana Este. The gross debt over EBITDA indicator ended at 3.7x. And they show proper levels of debt, where within the ring suggested by risk rating firms for a rating investment degree. Also, we have a mean life of our debt close to 9 years. This goes hand in hand with the nature of long term that we have in our concessions. Next slide, please. When it comes to the performance of the share of ISA in 2025, the performance was positive. It was valued 48%. And if we keep in mind that the dividends paid, the total return on the stock of ISA was 55%. The price of the stock at the end of the year was COP 24,660. And during the year, it reached a maximum of [ COP 26,300 ] and a minimum of [ COP 16,660 ]. It's important to highlight that the average volume transacted was [ COP 7,665 ], and this is important because it's a 23% increase, and this is reflected on a higher liquidity of the stock. At the end of the year, ISA reached stock capitalization of COP 27.3 trillion. Next slide, please. As usual, along with the disclosure of the results of the fourth quarter and the end of the year, we share with the market the proposed to distribute dividends that the Board of Directors of ISA will propose to the shareholders meeting held March 26. There are several elements worth highlighting for this proposal. First, we propose to distribute 50% of the net profit, which is equivalent to a dividend of COP 1,090 per stock. And this dividend agrees with a higher range of the profit distribution policy. It seeks to maintain a sound balance. So -- and this has been the brand of ISA between sharing the earnings and reinvesting for growth to contribute to the future valuation of the company. We consider that this is a responsible proposal with which we have a good level of liquidity and we protect our investment degree rating, and it's a component that's strategic to maintain the company's competitiveness in the region. And with this, I'd like to give the floor to Gabriel to give us some closing remarks. Gabriel Melguizo Posada: Thank you, Jaime. Now we're ending this webcast. Before we begin our Q&A session, let me give you some closing remarks. First, we began the year defining a strategy that ensures the company's future, positioning as a leader in energy transition we had a 2025 with its sound operational and financial performance, and we still win bids and execute with discipline and responsibility our investment commitments. Third, we implemented changes to enhance our structure and our capabilities for the organization to drive our strategic decisions. We also ratified our commitment to sustainability, which is fundamental to our strategy. In 2025, we increased the execution and above investments by 31% according to our ISA 2024 strategy. We also have a stock that had a total return for shareholders of 55% and considering the valuation of the price. And we also had financial results that allow us to grow and keep the investment degree rating. So with this, we end our presentation. Thank you again for joining us, and now we can begin our Q&A session. Mateo Toro: Gabriel, thank you. Let's begin the Q&A session. Let's begin with a question from Andres Duarte from Corfi. And he asks, how do you account the project -- the new project that we won in Peru? The TOCE/CEPI, I understand that ISA and GEB are not controlling. Jaime, could you give us a hand with this question? Jaime Falquez: Sure. Thank you, Andres, for your question. The project that you referred to is the Eléctrico Consorcio Yapay, a project that we're executing in Peru, along with the Grupo Energia Bogota. It's a consortium in which we are co-controllers. So neither ISA or Grupo Energia controllers, so we cannot consolidate line by line. This investment is acknowledged according to the international standards for financial information through the equity method, reflecting solely the economic participation, which -- of each of the company, in this case, 50% of ISA. Mateo Toro: Next question also from Andres Duarte, Corfi. Could you please give us an update on the project with GEB, the same project of TOCE/CEPI, but in this case, Gabriel Melguizo, can help us with this answer. Gabriel Melguizo Posada: Yes. Thank you, Andres, for your question. Okay. The TOCE/CEPI project, which is the abbreviation of the name of the substation, it is -- it really joins 3 projects in Peru. It's the largest project of its kind in Peru. It's a project of about 800 kilometers of line and $800 million approximately. This project -- I mean, really, these are two projects. The first two are under evaluation, the environmental study presented in 2025. And we're advancing in the design and contracting. In the second part of the project, which is CEPI, meaning Celendín-Piura, we are working to complete the environmental study to file the license request in the first quarter of 2026. So that's a development of the TOCE/CEPI project. Thank you, Andres, for your question. Mateo Toro: Next question from Andres Duarte as well, that I will join with another question from Florencia from MetLife. Could you give us an update on the problem that we had in Chile? Gabriel Melguizo Posada: Yes, of course, Andres and Florencia. Thank you so much for your questions. We're going to try to join them both. First, remember, February 20, 2026, Chile was notified by the SEC on the opposition of a fine of about $14.5 million. I say about it was -- but it's really equivalent to $14.5 million. That fine is related to what happened with the national blackdown that happened in January 2025. The resolution that gave way to this fine as part of the regulatory framework and the administrative part of the Chilean authorities that include many players, InterChile, which is our company, our subsidiary of ISA in charge of the transmission Chile, along with the corporate practice and is analyzing the scope of the resolution, and we'll continue managing this process, along with the mechanisms established by the local norms. So the legal team of the company has begun to analyze that defense and has decided to [indiscernible] this in every instance possible. For now, we have -- on Friday, we presented a resource reposition before the SEC and it's the first file we present. Now all of the above means that the company is not forced to pay the sum right now, and this scenario will remain during this [indiscernible] process. Once again, thank you, Andres and Florencia for your questions. Mateo Toro: Thank you, Gabriel. Let's continue now with the next question, which is focused also, do you feel that the energy policy in Colombia recognize the importance of transmission? This is from Andres Duarte as well, and also Pablo Franco, who is an expert. Could you give us a hand to answer this? Unknown Executive: Thank you, Andres, for your question. Sure. The public policy really show that transmission is part of the energy transition. For instance, we can see how the Ministry recently issued Resolution 14004, which shows the works that will be very relevant for the transition and that we will be given nationally and regionally. And these will have to be developed in the following years. And the purpose is to improve the reliability of the system to, of course, serve the increased demand and enable the renewable energy processes. Also, the Ministry has been reviewing a project of resilience guided to guarantee the robustness of the transmission infrastructure, and we hope that this resolution will be issued soon as a final one. Also the CREG, which has also incorporated in its agenda topics that have to do with transmission that are relevant, and to close the regular rate tariff review. And the UPME also is carrying out its analysis to incorporate in its expansion plan transmission works that have been identified and included preliminary in the modernization plan that was incorporated as part of the mission of this unit. Thank you for your question. Mateo Toro: Pablo, thank you. Let's continue with another question, and I'm going to join one Andres Duarte and one Juan Jose Muñoz BGT Pactual, who asked when and will ISA have it's new Chairman or President. Sonia Abuchar will help us. Sonia Abuchar Alemán: Thank you Mateo. And thank you for the question. The State Council ruled the annulment of the election. And retroacted everything that was made in the selection process to January 23, 24. And so for the last 2 years, since the moment that the sentence has been published within the company, with the Board of Directors, we have been analyzing the decision and how we will meet it. So we're in this process right now, we cannot determine when we will have a new president in the company. We are analyzing the decision of the State Council. But we will be informing you soon. Mateo Toro: Thank you, Sonia. We continue with the question from [ Hairo ]. How is ISA making use of the opportunities rising from the growth of companies that create energy from renewable sources? And how does it capture value within the energy transition? Gabriel Melguizo, could you give us a hand here? Gabriel Melguizo Posada: Thank you, [ Hairo ], for your question. The answer has different viewpoints. First, when you increase the number of renewable generation, this has to go out towards consumers. So this implies the need of building new transmission lines and the need of installing another type of technology that will contribute to have this energy flowing from solar, or wind farms. and that it has to be reliable on talking about static compensators and other number of equipment that contribute to energy transition. And everything that I'm talking about is a great opportunity. I mean, the increase of the grid that we will be building and the increased installations of these operations. And these equipment that we know and that we are aware of and that we will be placing throughout Latin America is a great opportunity. And it's part of the portfolio that the transmission business has $23 million from here to 2040. Another viewpoint to answer this question is that through the business unit that we created devoted to energy solutions, which basically refers to renewable generation through solar plants, and storage of energy. We aspire also to generate that renewable energy cell consumption of large industries. Through self-generation, and we expect to expand our energy storage business throughout Latin America in both fields, solar farms for self-consumption, and energy storage for either solutions, or end users is a huge market that we will be capturing surely throughout the world. And for 2040 strategy, we'll be capturing $47 billion. So the truth is, this question is very relevant to us and the answer is our capability to invest and to be leaders energy transmission in Latin America has to do with this. Thank you, [ Hairo ], for your question. Mateo Ochoa Toro: Let's continue with the next question. How do you -- how will you recover the money from Air-e in the Caribbean region? Gabriel, could you help us here? Gabriel Melguizo Posada: Sure. [ Carlos ], thank you for your question. Indeed, ISA and its companies has been working -- looking at the legal aspect directly and it is a sector to recover the accounts receivable from this company. This way, we have been working before the Ministry of Mines and Energy when it comes to the suspension. Last year, the temporary suspension of the supply made by this organism, which was suspended by the superintendence of public utilities through a circular. And we also made legal actions, which surely, all of you are aware of. There was a ruling. And right now, it's being appealed. We also work before the for superintendents of public utilities, seeking to enhance the business fund, which is a mechanism to serve these types of contingencies. And we have been holding meetings with the Ministry of Mines and Energy with the intervention of Air-e to find structural measures to solve the problem of this company. Of course, we do this directly and with the sector. And lastly, I'd like to mention that in July 2025, we have filed a suit against Air-e. When it comes to the second half of the year, but this was suspended until January this year because of a partial payment agreement made with this company, still in January, we renewed the project, and we will carry out with this execution. Still, of course, ISA and its companies still is analyzing the chance of filing new suits, so that this company can assume the payment of its obligations, subsequent and to have a structural solution that's convenient to us. Mateo Toro: Pablo, thank you. Next question. Which are the new projects for the Colombian market in next years? And first, let's hear to hear Pablo Franco and then Alejandro Velasquez, who is a Director of Mergers and Acquisitions. Unknown Executive: Mateo, thank you for the question. Yes, indeed. We have a series of resolutions and definitions that the mining energy planning unit has. We will be looking at a resolution that approves a series of projects that are very relevant to enhance transmission in the Caribbean and precisely to serve all of the needs that rise from the energy transition, and the incorporation of all these nonconventional renewable sources from incorporating new technologies. And there we are booking for next years, of course, and serving the needs rising conventionally within our plants. Alejandro Velasquez: Expanding on what Pablo just said, we have identified opportunities in the region for the next months about $12 billion. Of these, about 48% of the amount corresponds to energy transmission. Others at 26% to new energy business. Geographically, 40% corresponds to Brazil, 42% to Chile, 8% to Chile and 10% to Peru. Particularly in Colombia for the energy transmission business, we identified 8 bids in addition to the projects contained in the urgent resolution that Pablo just mentioned. Mateo Toro: Thank you, Alejandro. Next question given by Gloria to Gabriel Melguizo. Could you please tell us how ISA operations hurt with Ecuador's commercial war? Gabriel Melguizo Posada: I can answer this two ways. I can look through transmission and market operator. What [Audio Gap] none of these really affect ISA. When it comes to transmission, we transmit energy towards Ecuador, or from Ecuador to here, through lines that come from the Jamondino lines en Pasto to Pomasqui en Quito. That line is available when the countries require exchanges. But revenues through that line, our part goes from Jamondino Pasto to the boundary with Ecuador. And this that depend on the amount of energy sent, instead of the availability of the asset. So we keep receiving the revenue normal from the line. These are the conditions of the transmission. The lines are there when the grid needs them. We are sorry, of course, that we don't have international transfers, of course, but these are the circumstances. The second pillar has to do with XM. It's not hurt at all because XM does not buy or sell energy and is not impacted. Thank you, Gloria, for your question. Mateo Toro: Next question from Florencia of MetLife. How does -- how much does Air-e owe? Jaime Falquez: Thank you, Mateo, for your question. To date, there's a reserve of COP 467 billion, of which COP 153 billion were reserved at the end of 2024 and COP 314 billion at the end of 2025. Mateo Toro: Thank you Jaime. Next, Juan Felipe asks, thank you for your presentation. When it comes to the energy storage, will you be incurring in batteries? Do you see opportunities of storage in Colombia given the limited capacity of renewables? Or do you see more opportunities in other countries? Gabriel Melguizo, could you give us a hand here? Gabriel Melguizo Posada: Thank you. I'm sorry, who asked the question? Juan Felipe? Mateo Toro: Yes, Juan Felipe did. Gabriel Melguizo Posada: Juan Felipe, thank you for your question. Truly, Transelca is a vehicle. It's the first vehicle of ISA to execute or better build solar generation to store energy in Colombia. It's the first vehicle in Colombia, meaning it's -- we're not saying that Transelca will be operating in other countries. We're analyzing the market in the rest of Latin America. But for now, we see a great opportunity. We have an interesting portfolio to execute it in Colombia initially by 2030, both in solar generation and in storage. And we see that there's a good number of projects possible. This is a business unit that was recently born and just beginning, but we expect to give you good news soon. When it comes to the rest of Latin America, however, we are focused mainly in Chile and Peru, exploring their market. Chile, we're focused on storage of energy and in Peru, generation and storage of energy. That's what we have. But let me conclude. Transelca is only for Colombia, and we see that there's a good market for energy solutions. Thank you, Juan Felipe for your question. Mateo Toro: Thank you, Gabriel and Juan Filipe, for your question. Allow me let me review what other questions we may have that we have not answered yet. With regards to the questions we have, this ends our earnings call of the fourth quarter of 2025 of ISA and its companies. We'd like to thank you all for joining us, and we'll see you next time. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call]
Oliver Gloe: Welcome to the Latham Group, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Casey Kotary, Investor Relations representative. Please go ahead. Casey Kotary: Thank you. This afternoon, we issued our Fourth Quarter and Full Year 2025 Earnings Press Release, which is available on the Investor Relations portion of our website, where you can also find a slide presentation that accompanies our prepared remarks. On today's call are Latham's President and CEO, Sean Gadd; and CFO, Oliver Gloe. Following their remarks, we will open the call to questions. During this call, the company may make certain statements that constitute forward-looking statements which reflect the company's views with respect to future events and financial performance as of today or the date specified. Actual events and results may differ materially from those contemplated by such forward-looking statements due to risks and other factors that are set forth in the company's annual report on Form 10-K and subsequent reports filed or furnished with the SEC as well as today's earnings release. The company expressly disclaims any obligation to update any forward-looking statements, except as required by applicable law. In addition, during today's call, the company will discuss certain non-GAAP financial measures. Reconciliations of the directly comparable GAAP measures to these non-GAAP measures can be found in the slide presentation that accompanies our prepared remarks, which can be found on our Investor Relations website. I'll now turn the call over to Sean Gadd. Sean Gadd: Thank you, Casey, and thank you all for joining the call to discuss Latham's Fourth quarter and Full Year 2025 results. In my first Conference Call as CEO of Latham I have the good fortune to be reporting on the strong results that the company achieved in both the fourth quarter and the full year of 2025. This performance demonstrates excellent execution by the Latham team. As you have seen from this afternoon's earnings release, fourth quarter revenues were up 15%, showing a solid growth across all of our product lines. We were especially pleased by the fourth quarter pickup in our In-Ground Pool sales which brought our full year In-Ground Pool sales to 1% above 2024 levels. The impressive performance per year within an industry in which we estimate the U.S. In-Ground Pool start declined low to mid-single digits. With the benefit of good weather and extended selling season, dealers were able to work through their backlog. The strong result reflects an increased demand for Latham's fiberglass pools. Fiberglass represented 76.5% of our In-Ground Pool sales in 2025 with the year-on-year growth of Latham's fiberglass pool sales of approximately 2.5%. As a market leader, Latham has been the key driver behind the increased adoption of fiberglass pools, which we estimate gained another percentage point of market share in 2025 to account for approximately 24% of last year's U.S. pool starts. The steady growth in fiberglass market penetration in the U.S. reflects the success of Latham's branding and marketing programs, emphasizing the benefit of our fiberglass pool against any alternative solution. Competitive strength of fiberglass pools, mainly their fast and easy installation, sleek designs matching current consumer preference and lower maintenance requirements, all at an affordable price makes Latham fiberglass pools the best alternative in the marketplace. While the estimated 24% penetration of U.S. pool starts for 2025 represents significant growth from 16% in 2019, this is considerably below the 70% fiberglass penetration in my home country of Australia and meaningfully below the approximate 40% to 50% penetration in key European markets, which really excites me as I think about the future and the size of the opportunity. I have considered the attributes to fiberglass from the vantage point of my many years of experience successfully selling against the standard in the boating industry, I see substantial runway for accelerated conversions to fiberglass, particularly in the Sand States, which I'll talk about in a moment. Another key accomplishment for 2025 has been the positive momentum in our covers and liners product lines, which delivered a meaningful contribution in both fourth quarter and full year sales results. The 22% growth in autocover sales in 2025 was a function of very positive consumer response to the unparalleled safety and peace of mind that autocovers offer. This is further highlighted by our partnership with Olympic Gold Medalist and Pool Safety Advocate, Bode Miller and his wife Morgan to promote full safety and the safety advantages of our autocovers. As a reminder, Latham's autocovers are compatible with all the In-Ground Pool types with the advantage of providing the homeowner with a significantly more attractive alternative to fencing, while also delivering cost savings from reduced water evaporation, reduce energy for pool heating and reduced chemical consumption, essentially autocovers pay for themselves within 4 to 5 years. Liner sales increased 4% in 2025, thanks to our industry-leading lead times and the successful rollout of our proprietary AI-powered measuring tool. Measure streams lines, the liner and winter safety cover measurement, including process for installers, ensuring a high degree of accuracy that can be completed in as little as 30 minutes. This tool is fully integrated with the Latham order entry and processing system, which allows the installers to get real-time quotes to submit orders and track their status by providing Latham with first look at all quoting opportunities and helps optimize schedules and operations. Approximately 20% of the installers who purchased this tool during the year were mutilated, enabling share gain in our liner and winter safety cover products. In 2025, the Latham team executed effectively on a strategic priority, expanding into the Sand States, in particular, and company gained considerable ground in FRGP, our initial target market, achieving double-digit sales growth for the year. This good growth was achieved by expanding our dealer network, establishing a presence for Latham in several master plan communities and nurturing our strategic partnerships with select custom homebuilders, who will feature our fiberglass pools in their developments when they begin building. The percentage of Latham sales volumes derived from the Sand States remains steady at approximately 17%. This reflects our considerable growth in Florida and a pickup in Arizona, offset by the tough Texas markets where pool permits declined at a double-digit rate. I recently spent 2 weeks in Florida engaging with the commercial team and some of our dealers, while visiting our priority Mastered Plan Communities and touring our Zephyrhills manufacturing facility, which demonstrated to me that Latham has the best fiberglass pools in the industry. I came away getting more enthusiastic about the opportunity and upside in Florida more than I had originally thought, as I do my research in joining Latham. First, the opportunity for fiberglass pool penetration in Florida and other Sand States is large. Second, the advantage of fiberglass pools are resonating with qualified established dealers, several of whom indicated their desire to partner with us in our Mastered Plan Communities. They recognize the benefits of providing their customers with a high-quality product, which posts lighting durability, elegant appearances and a smooth low maintenance finish. Not only do they get to sell a great product that meets the needs of the homeowners that are able to capture the benefit of quicker, easier installation. Shorter cycle times mean that dealers can improve their cash flow through the install process and triple or quadruple the number of pools they sell an install, annually, resulting in more profit for them in the end. Thirdly, Latham clearly has increased its brand awareness amongst consumers and leaders in Florida. With several high-profile marketing campaigns paired with logical activations. We still need to do more of this as the #1 gap I see is ensuring the homeowners gain awareness of the true benefits of fiberglass. Why is the right solution for their backyard to enable their dreams of creating wonderful memories to come true. Together with the speed at which our pools have installed allows homeowners to enjoy pools in days instead of the traditional months when compared to the standard, which is concrete. In 2026, we plan to increase our investment in branding and marketing in a very targeted way to capture greater consumer awareness with a network of trusted dealers who are able to fulfill the demand we generate. I'm excited to bring a market development framework and approach to Latham and I believe will make us even more effective than we've been to date. As we continue to focus on accelerating organic growth, you can also expect Latham to continue to consider select acquisitions that provide us with revenue synergies and/or expanded geographic reach and will be accretive to our earnings. Just a few days ago, we completed an acquisition that meets all 3 criteria. Oliver will provide more details shortly, from my perspective, Freedom Pools represent excellent acquisition, and that is: one, significantly expands our market position in Australia and New Zealand, 2 countries where fiberglass pools are highly preferred by consumers and builders; two, it gives us entry into new markets in Western Australia which represent a large markets of Perth, one of the fastest growing cities in Australia; and thirdly, it is immediately accretive to our earnings. We welcome the Freedom team to Latham. To sum up, our fourth quarter and full year 2025 performance demonstrates Latham's fundamental strengths and ability to drive considerable growth in sales and adjusted EBITDA in a down market. This proven capability differentiates us in the marketplace and provides the foundation for future growth and enhanced profitability. Now I'll turn over the call to our CFO, Oliver Gloe. Who will provide further detail in our Q4 and full year financial performance, including the drivers of our continued margin expansion in 2025 and in support of our 2026 guidance. Oliver? Oliver Gloe: Thank you, Sean, and good afternoon, everyone. I am pleased to review our fourth quarter and full year results and to report that our full year 2025 sales exceeded the midpoint of our guidance range, while our adjusted EBITDA performance was above our guidance range, demonstrating the benefits of volume leverage and production efficiencies. Please note that all comparisons we discussed today on a year-over-year basis compared to the fourth quarter and full fiscal year 2024, unless otherwise noted. Net sales for the fourth quarter of 2025 were $100 million, up 15% compared to EUR 87 million in the fourth quarter of 2024, reflecting strength in fiberglass pool sales as well as increased demand for autocovers. Organic growth was 14% for the quarter. For the second consecutive quarter, all 3 of our product lines In-Ground Pools, pool covers and pool liners experienced year-over-year growth. By product line, In-Ground pools sales were $50 million, up 15% from Q4 2024, showing strength in both fiberglass and packaged pools and representing a quarterly shift in the sales cadence given an elongated season due to favorable weather conditions in Q4. Cover sales were $37 million in the quarter, up 19%, benefiting from increased adoption of order covers and the 2 small covers acquisitions we made in February of 2025. Liner sales were $13 million, up 2% compared to fourth quarter of 2024, remaining resilient relative to the overall pool market due to the replacement cycle of these products and our industry-leading lead times. Gross margin expanded by 340 basis points to 28% in the fourth quarter, primarily resulting from volume leverage and the continued benefits from our lean manufacturing and value engineering initiatives. SG&A expenses increased to $31 million up $4 million from $27 million in Q4 of 2024, largely driven by investments made in sales and marketing initiatives and personnel to drive increased penetration of fiberglass pools and autocovers as well as higher performance-based compensation. Net loss was $7 million or $0.06 per diluted share compared to $29 million or $0.25 per diluted share for the prior year's fourth quarter. Fourth quarter adjusted EBITDA was $10 million, up $7 million, almost 3x the $3.6 million in the prior year period. The strong performance primarily resulted from increased fiberglass pool sales, benefits from higher plant absorption, efficiencies from lean manufacturing and value engineering initiatives and continued cost discipline. Adjusted EBITDA margin was 11%, a 630 basis point increase year-over-year. Now turning to our full year results comparisons. Net sales were $546 million, up 7% compared to $509 million in the prior year, reflecting higher sales volume from both organic and acquisition-related growth and tariff-related price increases. Notably, this performance was achieved while we estimate the U.S. In-Ground Pool market to be down low to mid-single digits in 2025. Organic growth of 5% benefited from execution on our key strategic priorities to drive awareness and adoption of fiberglass pools and autocovers. Acquisition-related growth reflected Coverstar Central transaction that was completed in August of 2024 and the acquisitions of smaller Coverstar New York and Tennessee, which we completed in February of 2025. All 3 product lines showed year-over-year growth. Latham's In-Ground Pool sales for the full year were $262 million, up 1% year-over-year. Importantly, this growth was achieved against a backdrop of a decline in U.S. In-Ground Pool starts in 2025, primarily as a result of our success in increasing the awareness and adoption of fiberglass pools. As Sean mentioned, we estimate that market penetration of fiberglass pools increased again by 1 percentage point in 2025, and we see a long runway for continued conversion from concrete pools, especially in the important Sand States markets. Cover sales were $161 million, up 22%, driven by organic and acquisition growth. Liner sales were $123 million, up 4% compared to the prior year period, reflecting our industry-leading lead times and the increased adoption of our MeasurePRO tool, which enables pool business to accurately and efficiently measure both pool liners and covers. With the introduction of our mobile app MeasureGO in the third quarter of 2025, we broadened access to more business as we seek to make the measurement and quotation process as seamless as possible. Gross margin expanded by 320 basis points to 33% compared to 30% in the prior year, primarily resulting from our lean manufacturing and value engineering initiatives and a margin benefit from the 3 Coverstar acquisitions as well as volume leverage. SG&A expenses increased to $123 million from $108 million in 2024, reflecting our increased investments in sales and marketing initiatives to expand the awareness and adoption of fiberglass pools and grow our market share in the Sand States as well as investments in digital transformation, along with the impact of the Coverstar acquisition. Net income for the full year was $11 million or $0.09 per diluted share compared to a net loss of $18 million or $0.15 per diluted share from the prior year. Adjusted EBITDA was $100 million, up $20 million compared to $80 million in the prior year as a result of higher volume and our structurally improved business model. Adjusted EBITDA margin of 18.3% was 250 basis points above the 15.8% in 2024. Thanks to our strong gross margin performance which more than offset higher SG&A expense. Turning to our balance sheet and cash flow statement. We ended the year in a strong financial position, which gives us the financial flexibility to fund organic growth projects as well as acquisition opportunities. Our cash position at year-end was $71 million. Net cash provided by operating activities was $11 million in the fourth quarter and $51 million for full year 2025. We ended the year with total debt of $280 million and a net debt leverage ratio of 2.1, in line with our expectations. Capital expenditures were $25 million for full year 2025 compared to $20 million in the prior year, with most of the additional investments going into our facilities in Florida and Oklahoma as well as malls for smaller rectangular pools with spas, which are popular in the Sand States. As Sean noted, we are pleased to have recently completed the acquisition of Freedom Pools. We expect incremental net sales of approximately $20 million and incremental adjusted EBITDA of $4 million on an annualized basis, which we have reflected in our 2026 guidance. In addition, we recently completed the purchase of 4 of our key fiberglass production sites. These sites, which previously we leased are important to our network and future growth. Including these acquisitions and the buildup of seasonal net working capital, we expect our net debt leverage ratio at the end of the first quarter to remain below 3 and to improve again thereafter. Turning to our outlook for 2026. We believe that U.S. In-Ground Pool starts this year will be approximately in line with 2025. Despite these continuing tough conditions, we believe Laser is uniquely positioned to outperform the overall market once again. This expectation is supported by our category leadership in fiberglass pools and autocovers and the continued execution of our strategic priorities, namely driving the awareness and adoption of fiberglass pools and autocovers, accelerating fiberglass conversion in the important Sand States markets and opportunistically making accretive acquisitions. With this as a backdrop, our 2026 guidance is between $580 million and $610 million in net sales and between $105 million and $120 million in adjusted EBITDA, representing year-on-year growth of 9% and 12.7%, respectively, at the midpoint. This includes our expectation for mid-single-digit organic growth, together with the benefits from the Freedom Pools acquisition and consider increased marketing expenses. Capital expenditures are projected to be in the range of $42 million to $48 million. In addition to the $25 million that includes maintenance CapEx for 2026 and the carryover of certain projects from 2025, the additional expenditure relates to the purchase of 4 of our fiberglass manufacturing facilities in Florida, Texas, California and West Virginia as well as investments to upgrade the newly acquired Freedom Pools manufacturing facilities. With that, I will turn back the call to Sean for his closing remarks. Sean Gadd: Thank you, Oliver. As you just heard, we are expecting a year of very positive performance from Latham in 2026. Our 9% growth expectations for this year at midpoint guidance is underpinned by Latham's specific performance, as we believe trough market conditions are likely to continue through much of the year with new U.S. In-Ground Pool starts approximately at 2025 levels. From my experience, soft markets are good opportunities for us to accelerate our Sand States strategy and execution as dealers and homebuilders be more willing to consider change in soft markets versus stronger markets. In 2026, we'll continue to execute on our key strategic priorities, namely to build the Latham brand and drive increased awareness and adoption of fiberglass pools and autocovers which we expect will enable us to continue to significantly outperform the U.S. In-Ground Pool market, while maintaining our focus on safety and excellent execution. Since joining Latham, I have met many of our customers industry leaders and our commercial people and have toured 3 of our manufacturing facilities. It is clear to me that Latham is a highly respected brand and a company with the best and broadest product lineup in the industry with a highly engaged workforce. I see tremendous opportunity for Latham to grow in the years ahead. I'm excited to drive our market penetration in the Sand States, rest of North America, Australia and New Zealand. With our extensive distribution network, high-quality fiberglass pools and autocovers and best-in-class lead times, we are positioned for accelerated profitable growth, especially when the market rebounds over the coming years. I'll be leveraging my past experience to drive greater consumer awareness and demand for fiberglass and autocovers and further enhance the value we deliver to our dealers. I would like to thank our dealers, industry partners and our employees for their contributions to our success in 2025, and I look forward to working together in 2026. Operator, please open the call for questions. Operator: [Operator Instructions] The first question is from Greg Palm with Craig-Hallum Capital Group. Greg Palm: Congrats on a good finish to the year. Sean, I wanted to start with you and recognize it's been a kind of short time since you've been CEO, but what do you learn? What excites you? And it's probably a little bit too early to ask this question, but in terms of any change in strategy or anything you want to lean into a little bit more going forward? Sean Gadd: Thanks, Greg. Good question. It's been a fast 8 weeks, I guess, and I've seen a lot of parts of the business. From my perspective, I'm very excited about what the opportunity looks like in the Sand States. I think that is something we will continue to lean on. I think from my perspective, what I've learned from my past market development, I think I can help the team to get a little more focused to drive true market developments into the MPCs. And for me, that's really about lead generation, quality of leads, getting the brand where we wanted, at the same time, getting qualified dealers into the MPCs that are going to fulfill that demand. When I think about qualified dealers, I think there's a lot of work we can do around segmentation, targeting, positioning around which the right dealers, being clear on what our positioning is for the dealers, which is to make more money. And then being importantly -- important for me is getting those dealers to position in the home to be able to talk to our fiberglass value proposition as well as we would. And I think when we do all that right, I think we'll start to get some leverage in the Sand States. And then when I back out a bit, in general, the business is running very well. I see opportunity even in our northern markets, which will ultimately help us fund the things we want to do and need to do in order to grow in our Sand States. Greg Palm: And you seem pretty excited about the conversion opportunity. And I'm just curious, is there any change in strategy in helping to accelerate that conversion opportunity? Or is it more just sort of leaning into some of the initiatives that have been sort of done and really accelerated over the last year or so? Sean Gadd: I think there's a lot of leaning in, but one of the things I'll add to it is managing the installed cost of the job. So if anything, when you're selling against the standard, the natural state is to put insurances into the job, so you don't lose any money or the job doesn't go wrong. And so controlling that to some degree because again, we're a very small portion of the total cost of a job. So us being able to manage it all the way through, I think, will be an important addition to what we're trying to do. Greg Palm: And then just one for Oliver. Can you help just unpack the guide for '26 on a segment basis in terms of that mid-single-digit organic growth. Is that across the board in pools, covers, liners? Is it skewed towards one category versus the other? I know you're coming off of a pretty good year in covers, but what's your overall thought on a segment basis? Oliver Gloe: Yes, Greg. So again, overall, the guide is about 9%. The organic part of it is 6%. Across the different product categories, as you would expect, the majority of the growth and key growth drivers will continue to be fiberglass, the continued conversion, especially indexing towards the Sand States as well as continued growth through awareness and adoption of autocovers. We do, as part of our guidance, project that all 3 of our product categories continue to grow like they've done in '25, but again, indexing towards fiberglass pools as well as autocovers. Operator: The next question is from Tim Wojs with Baird. Timothy Wojs: Maybe just first question that I had, just I guess how would you if you kind of step back and look at the early demand indicators that you have in maybe January and February and kind of coming into '26. I guess how would you kind of frame those relative to kind of a normal year for '26. Sean Gadd: A couple of things. First, obviously, we just come out of the season where we get to meet all of our dealers and our industry partners. I think it's been a relatively strong -- obviously, a quarter is relatively strong in terms of Q4. And that's driven by a number of things. One, I think really good performance from the team. Two, we've got an elongated sales cycle in that quarter because the weather turned out to be pretty good, which as we think about going to Q1, it's a little bit different with a bit of bad weather coming through. But in general, I think the industry is sort of believing that it's going to be a flat year. And I think there are so many things that are kind of going against the industry today that we need to be lifted, things like interest rates, things like the consumer confidence that will help get the starts going. But in general, tough market conditions, but feel good about what we can deliver in that environment. Timothy Wojs: And then, Oliver, I think the midpoint of the guide is maybe 50, 60 basis points of EBITDA margin expansion. Could you just help us kind of break that down between what the gross margin contribution is and maybe what SG&A should be? Oliver Gloe: As you would expect, right? So the majority or the margin contribution comes from higher gross margin, especially the continuation of our initiatives in lean manufacturing and value engineering. Those paid dividends in 2025. They will continue to pay dividends in '26 as well. You will, with the increased top line, see a moderate degree of volume leverage. And then to bring that down on an EBITDA percentage, which is 60 basis points up, you have higher gross margin that outperforms the increased investments in SG&A as we are ramping up our sales and marketing efforts in fiberglass, especially geared towards the Sand States. Timothy Wojs: I mean I guess if I look at gross margins, you you're probably up close to 300 basis points a year for the last couple of years. I mean, is it that type of magnitude of gross profit improvement? Or is it a lot more measured this year? Oliver Gloe: I want to say it's probably not going to be the 300-plus gross margin expansion, 300 basis points plus gross margin expansion that you've seen both in '25 as well as '24. It will be a little bit more moderate, but our expectation is that we take a meaningful step towards that 35% gross margin. Timothy Wojs: Very good. And then just the last one, just on the Sand States. Did you -- I didn't quite catch it -- did you say the Sand States as a percentage of sales were about flat year-over-year in terms of, I think, 17% or, I guess, similar year-over-year. I guess, a, did you say that, I guess, two, how does Florida do within that? Oliver Gloe: That's correct. So we stayed about flat. Within that, Florida was the shining star and certainly our focus in 2025, with a double-digit growth and a strong outperformance versus the market, as measured against the permit data. I think a close follow-up to that was Arizona, obviously, on a much more smaller scale for us, right? And then we had Texas, which obviously where permits were down and as a result, that reflected in our business as well as we shifted focus towards Florida. Timothy Wojs: And is it fair to think that now that you've become a little bit more seasoned in Florida and you've got at least one full season, if not a season in half behind you that the Florida trends could actually begin to accelerate from here -- as you kind of build up. Sean Gadd: I'll take that. I do think we should be able to accelerate Florida. What I'm trying to figure out as I get into the business is a formula that we can take into Texas. So obviously, we've got the Sand States strategy. I believe that we've got most of the pieces right for that. We've got to do some fine-tuning. And then I think there's a piece as well to think about, which is builder, how we think about single-family new construction builders. I've got a background in the new construction world, and I think I've got some segmentation models that I think can work. And like I said on my call was you've got an opportunity in down market to really change the way people do things. And there's 2 different paths for a builder when they think about a down market is to pretty much batten the hatches or to differentiate their way out of it because they're trying to sell more homes or sell more homes or sell for more money. And so we've got examples of both. I've got an example of Lennar telling us [indiscernible] and you've got a Taylor Morrison who's offering $50,000 of upgrades or actually including a pool. So I think that's a piece that I'd like to understand a little bit more before we go and really look to accelerate across the south. Operator: The next question is from Scott Stringer with Wolfe Research. Scott Stringer: When I dig into your 10-Ks and 10-Qs, it seems like industry pricing has been fairly muted for the past couple of years. Maybe some of that's mix. So just wondering what your outlook for pricing is in 2026 and if there's any pricing power in the industry this year? Sean Gadd: Yes. I think you're absolutely right, price has been sort of flattish. I'll remind you, though, that during 2025, right around June, we did have a price increase of about $10 million to cater to the tariff headwinds that we saw at the time and still see today. So from a price perspective in 2026, you have 2 things. One is the run rate and full year impact of that June 2025 price increase. Again, for simplicity of math and modeling, take half of the $10 million plus the normal annual and seasonal price increase that we usually take for -- to cover inflation and so forth. So I want to say price given us being the combination of both will probably be adding 2% to our top line. Scott Stringer: That's interesting. And then for my follow-up question, just on customer financing, interest rates seem to be coming down a little bit here, but outlook for flattish pool installs. So is interest rates a tailwind in this sort of macro backdrop? Or is that not really embedded in the outlook? Sean Gadd: So I want to say -- so interest rates certainly held. They've certainly come down, we don't yet see a pickup from that. And what I attribute that to is in an environment where the next quarter might have a lower interest rate, I think a lot of homeowners on the sidelines, right? An expectation of lower interest rates ahead just means that the pool buying decision tomorrow will be less expensive than the pool buying decision today, at least for the part of interest cost. So I think it's a good trend. I think what I would like to see in 2026 is that we get to the new normal, a new interest rate that is stable going forward. I think that might incentivize the homeowner to make that decision to buy a pool in the season. Operator: The next question is from Matthew Bouley with Barclays. Anika Dholakia: You have Anika Dholakia on for Matt today. So first off, I just wanted to circle -- so I just want to circle back on the MPC strategy. You guys spoke to leaning into the conversion efforts and you called out more growth this quarter in Florida, which is great to hear. Right now, it seems that you guys are targeting smaller midsized communities. So I'm just curious on the longer-term vision for this. Is the vision to partner with large-scale production builders? Or how are you thinking about further penetration in this channel? Sean Gadd: Thank you, Anika. I'll answer that. I mean we are -- the MPCs, I'll start with relatively large. When I drove through there, you're talking communities of 65,000 homes. So it's a pretty large community. Obviously, multiple builders in that community. The majority of pools, I want to understand, go in sort of 1 year after purchase or 1 year after you move in. And 1 to 3 years. So the start or where we are today is pretty much going aftermarket to go -- and go and take that MPC, but I do envisage us going after builders, but you mentioned the big national builders. You really got to earn your way to the space with national builders. And from my perspective, market development starts at the highest price point that's available to you and you're looking for a visionary builder who wants to put pools to differentiate themselves. And then slowly, you work your way down to price points -- so you eventually land when you face to face competing with National Builder. At that point, the national builders start to pay attention. So I do think we'll end up playing in that space. I don't think we are ready to do that yet, but I do see that as being a future play for us as we slowly do our market development to get to that price point. Anika Dholakia: Great. And then for my second question, Oliver, can you give us more detail on the appetite for capacity expansion beyond these 4 facilities you guys mentioned? Or do you feel well equipped with the current capacity levels in 2026? And then just any details around the cadence of the spend flowing through the year? Oliver Gloe: Yes. I think, first of all, let me address the purchase of the 4 fiberglass facilities. That were facilities that were sort of in our grid already. We lease them. They're very strategic for us. We didn't want to buy them and then did that earlier in the year. We did that early February. I think from a capacity standpoint, I think we have everything we need, right? I always -- in the earnings call, I always referred to when this business was -- or when the market was at 117,000 pools in 2021, we actually had free capacity, especially in fiberglass since then, obviously, the market is almost at half. And we've done some reduction of redundant capacity in the aftermath of that market decline, but we've also built capacity. We've built capacity through Kingston, the expansion of Oklahoma. So net-net -- and then I might add, we also built capacity through our lean and value engineering initiatives. So net-net, we probably today have more capacity than we had when the market was double the size. So I think from a high-level perspective, we have what we need from a capacity standpoint for the foreseeable future. I think as we develop our Sand States strategy, there are some geographies with one in Arizona that may need some adjustments going forward, in terms of building capacity. But I think for now, we have what we need. Operator: Next question is from Susan Maklari with Goldman Sachs. Susan Maklari: My first question is on the dealer backlog coming into this year. Can you just talk a bit about where they are? And what you're hearing from your dealers ahead of the spring. Sean Gadd: Yes. There's 2 parts to that question. The first one is our dealers were able to get a lot of work done with the extended season in Q4. That said, when I think about even just our backlog, very pleasing results early in the year. Obviously, weather is playing a little part of that right now. I mean I'm sitting here in New York and it's snowing. But in general, I'd say that backlogs look pretty good. I think that the dealers are feeling relatively optimistic about where the year might be. Susan Maklari: All right. That's encouraging. And then turning back to the margins. You've made a lot of really nice progress with the value engineering initiatives. Can you talk about where you see opportunities from here? And how we should think about the benefits of that starting to flow through. Oliver Gloe: So I think let me start with lean manufacturing. Lean manufacturing is more working on the process, whereas value engineering is more working on the product. I think lean manufacturing between the 2 is the more mature program. Think of a lot of Kaizen events, workshops that are then after completion, expanded to best practice learning and expanded to the other sites. I think lean manufacturing is in our DNA. It's how we improve on a year-to -- on a year-by-year basis, lots of little projects that add up to something meaningful at year-end. And I expect that to continue over the next few years as well, whereas value engineering think of the work on the product to make the product more -- give it a higher quality, give a better appearance, but also take out some costs, right, reengineer the material basis. So you would say there are more low-hanging fruit and more bigger projects that we then can replicate across the grid. Again, lean manufacturing, a little bit mature, value engineering is probably more new to us. We have a great organization with PhD level material scientists that we have great expectations for in 2026 as well as the years beyond. Susan Maklari: And maybe just building on that, Oliver. You've done a lot in terms of new product introductions or relatively recently. Can you talk about the momentum that you're seeing with those? And anything that you have planned for 2026 in terms of product launches that we should be aware of or paying attention to? Sean Gadd: I'll take that, Susan. I think from my perspective, we've done a fair bit of -- to your point, a fair bit of innovation. We don't disclose kind of what we've seen so far in terms of growth. But what I will tell you, based on our movements around the marketplace, we've got a -- we've reacted to some trends and have built the right product lines to basically cover where the market is going, in general. And then we've got Sand States-specific investment around product, which has been completed. So we have the right product for Florida that will enable us to penetrate, and we now are starting and have pretty much the right product for Texas as well. So as the Sand States grow, you would expect those product lines to grow as well. And then obviously, with Measure, we continue to drive that with a good penetration in the first year of -- first full year of launching, and we see that as continuing to penetrate through the marketplace and getting more people using it, enabling us to get more liner and safety covers. Operator: The next question is from Shaun Calnan with Bank of America. Shaun Calnan: Just the first one. So we've seen a pretty strong improvement in search trends for new pools and then meaningful outperformance in the search trends for Latham. What do you think is holding potential buyers back at this point? And how do you unlock that and turn those into sales? Is it just a matter of rates, consumer confidence? What do you think the key drivers are? Sean Gadd: Yes, that's a good question. I think it's multifaceted. One, when I was in Florida and certainly at the International Builder Show, I was surprised how many people didn't understand fiberglass, didn't even know how fiberglass pools get installed in the backyard. And one person actually asked if it comes in 2 pieces. So we've got some education, basic education we need to do and awareness, which is -- and you'll see that there's ads on TV, and that will continue and will always be on. The second part of it is we are -- we don't -- a homeowner doesn't engage with our brand at a high frequency. So we're not a consumer good. However, when they're in the cycle of buying something, they do engage. Now the key for me is ensuring when they engage and get on to the path to purchase that we don't drop them, okay? And we don't lose them. And so when I think about what causes a homeowner angst and why they might drop off the path to purchase, it's usually around decision-making. And the first decision-making is what contractors should they use. Do those contractors going to be here next year when something goes wrong. So that's the first question we have to help them feel comfortable with. And how do we do that is we make sure that, again, segmentation, the right dealers are available to them at the MPC so that we can make sure that the story is being told in the kitchen table and the work and the quality is where we want it to be in the MPCs. The second part, second challenge will be around colors and around shapes and sizes, right? So those are all decision points where a homeowner might get frustrated and might decide to defer. And so we're going to make -- our job is to make all those things with tools as easy as possible, which we will develop over time, but make sure that we meet our consumer when we need to and make sure we have the right tools to make their decision-making much easier, then at least we're controlling what we can control. The macro environment is out of our control. When that comes back, we'll get the benefit of it, but we are planning to do to make the power to purchase much easier than it is today. Shaun Calnan: Great. And then on the acquisition of the manufacturing facility, so that's increasing CapEx next year. Is there any impact to the P&L in terms of lease expense or depreciation and amortization? And then what are you guys expecting for free cash flow next year or this year? Oliver Gloe: So in terms of the impact to the P&L, and I'll limit my comments to EBITDA. So the purchase replaces a lease expense in the neighborhood of about $1.5 million annually. In terms of free cash flow, we don't specifically give guidance on free cash flow. But we've disclosed our CapEx need. The acquisition in Freedom was about $17 million and net of those 2 impacts, meaning the acquisition of the 4 fiberglass facilities as well as the acquisition of Freedom Pools, the additional EBITDA will flow through to free cash flow. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks. Sean Gadd: First of all, I want to thank everybody for joining us today. Obviously, this is my first call with Latham, and it's been a good time to join the business because we had a fantastic Q4 and certainly a good 2025. Very excited about what 2026 will bring and beyond. I think we've got lots of opportunity, great product, a great brand, and I think we can build on that to make it even better. With that, obviously, I've met some of you in the different shows, I look forward to catching up with you on calls post this call and then out at some conferences in the near future. So thank you very much. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Cynthia Hiponia: Good afternoon, and welcome to Box's Fourth Quarter and Fiscal Year 2026 Earnings Call. I'm Cynthia Hiponia, Vice President, Investor Relations. On the call today, we have Aaron Levie, Box Co-Founder and CEO; Dylan Smith, Box Co-Founder and CFO. Following our prepared remarks, we will take your questions. Today's call is being webcast and will also be available for replay on our Investor Relations website. Supplemental slides are now available on our website. On this call, we will be making forward-looking statements, including our first quarter and full fiscal year 2027 financial guidance and our expectations regarding our financial performance for fiscal '27 and future periods, including gross margins, operating margins, operating leverage, future profitability, net retention rates, remaining performance obligations, revenue and billings, net tax benefits and the impact of foreign currency exchange rates, and our expectations regarding the size of our market opportunity; our planned investments, future product offerings and growth strategies; the timing and market adoption of and benefits from our new products, pricing models and partnerships; our ability to address enterprise challenges, enhance our product capabilities and deliver cost savings for our customers; the impact of the macro environment on our business and operating results; and our capital allocation strategies, including potential repurchase of our common stock. These statements reflect our best judgment based on factors currently known to us, and actual events or results may differ materially. Please refer to our earnings press release filed today and the risk factors and documents we file with the SEC, including our most [ recent ] quarterly report on Form 10-Q for information on risks and uncertainties that may cause actual results to differ materially from statements made on this earnings call. These forward-looking statements are being made as of today, March 3, 2026, and we disclaim any obligation to update or revise them should they change or cease to be up-to-date. In addition, during today's call, we will discuss non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results in our earnings press release and in the related supplemental slides, which can be found on the IR page of our website. Unless otherwise indicated, all references to financial measures are made on a non-GAAP basis. Finally, please see our earnings deck, again, posted on our IR website for a more detailed look at our Q1 and full year '27 guidance. Thank you. With that, let me turn the call over to Aaron. Aaron Levie: Thanks, Cynthia, and thank you all for joining the call today. We delivered strong Q4 operating results, reflecting continued growth in customer demand for Box AI and the success of our Enterprise Advanced offering. We achieved revenue of $306 million, up 9% year-over-year or 8% in constant currency and Q4 EPS of $0.49, above our guidance. In fiscal 2026, we drove revenue of $1.18 billion, up 8% year-over-year, with operating margins of 28%. It was a defining year for Box as we executed on the launch of Enterprise Advanced, which brings together our most powerful capabilities around intelligent workflow automation, advanced AI and secure content management to enterprises. Enterprise Advanced customers have reached 10% of revenue, and we're incredibly excited about this early traction and continued momentum. Examples of Enterprise Advanced customer wins include a leading biotech company uses Box to manage large volumes of commercial documents but currently relies on manual searches to find key information. By upgrading from Enterprise Plus to Enterprise Advanced, the company will use AI-powered data extraction and integrated apps to surface critical commercial data directly from documents. Next, a leading global robotics company uses Box as the core platform for its revenue operations and content workflows. The company upgraded from E Plus to Enterprise Advanced to streamline quote creation and approvals with Box Doc Gen, Box Sign and Box Apps to increase throughput and reduce errors. They also plan to apply metadata extraction and OCR to financial and legal documents to automate data capture and better manage contractual risk. To understand what's driving the momentum with Box, it's important to think about the criticality of enterprise content when it comes to driving transformation with AI. Nearly every enterprise leader that I talk to today is looking to transform how their company operates with AI. They're looking to accelerate tasks across their organizations, ranging from reviewing legal contracts and doing financial analysis to accelerating pharma research and spreading expertise across their organization. They quickly find that for AI agents to be effective in a workflow, agents need critical context about their business. They need to understand the company's product road map, marketing strategy, HR policies, internal best practices, planning insights, strategy decisions and whatever else makes that business unique. Much of that unique context lives inside of enterprise content, ranging from contracts and financial documents to research documents and marketing assets, all housed inside of PDFs, documents, media assets, collateral, spreadsheets and markdown files and more. All of this enterprise content is the digital brain of an organization, containing the most important insights precisely because of their unstructured nature. Files provide a universal way to create, capture and share information between systems and people, which is why the growth of content continues to explode. Yet the vast majority of this data, which makes up 90% of corporate data has been underutilized until today. Now AI agents can finally help us tap into this critical business information and use it to accelerate knowledge work that previously could never have been automated. As we prepare for a world where there will be a 100-fold more agents inside of an enterprise than people, we will equally see incredible growth in unstructured data. Files are quite simply the native unit of work for agents. Agents use files to keep track of their work. They leverage files as context about the tasks that they're doing and use files to share back and forth with their human counterparts. And as AI agents help us augment all of our work across industries like pharma or financial services, legal and healthcare or the public sector, these agents will need the same level of security, data governance, auditability, logging and access controls that we've required for people in the enterprise. As we've seen with the growth of products like OpenClaw or the launch of Claude Cowork and others, agents may spin up countless sessions and will need their own secure file systems and sandboxes while also being able to easily collaborate securely with other people and agents. Thus, to have an effective AI agent strategy, companies fundamentally need a content strategy. They need a secure platform to manage critical content and ensure it can connect to all of their people, agents and applications. This is what we're building at Box with our Intelligent Content Management Platform. And FY '26 was another fantastic year of product innovation and momentum to ensure that we stay ahead of the market and power our customers' most critical content workflows with AI. Just in the fourth quarter, we announced the general availability of Box Extract, enabling enterprises to intelligently and securely pull the most valuable information from content and save it as metadata in Box, all powered by leading AI models. With Box Extract, companies can turn their documents into data, pulling out the structured data from contracts, invoices, marketing assets, research, financial documents and any other file type to automate workflows or glean critical insights in their business. In Q4, we also rolled out Box Shield Pro, a powerful new add-on that expands on existing Box Shield content protection and leverages agentic AI to bring new levels of scale, speed and automation to advanced security controls. We are also incredibly proud to have served as an early launch partner for Anthropic's Claude Opus 4.5 and Opus 4.6 releases, Google's Gemini 3.0 Flash and OpenAI's GPT-5.2, all available in the Box AI Studio. These are many of the foundational elements in our Intelligent Content Management Platform that we delivered in FY '26. Now looking forward, in FY '27, we will be delivering the next generation of AI agent features within Box, enabling AI agents that can do more long-running tasks and advanced work on enterprise information. Soon, you'll be able to give AI agents complete projects, and they will go off and work through your enterprise information to complete those tasks, powering everything from writing out complex RFPs to analyzing your contracts and generating a new one with the most relevant clauses. We are also building the most advanced AI-powered workflow automation capabilities with enterprise content. We will keep rapidly enhancing Box Extract to support even more complex document processing use cases. And with Box Automate, which we will launch in the first half of this year, customers will be able to combine human and agent-powered workflows to automate any content business process in an enterprise. And combined with new features in Box Apps, we will deliver full no-code business workflows from contract management to digital asset management and more. Throughout FY '27, we will continue to advance our functionality across Box Shield to enable more intelligent threat prevention and data classification with new Box Zones sites for enhanced data residency, Box Governance to power deeper lifecycle management features and new functionality to help improve the security of AI agents in Box. Finally, this is going to be a major year for the Box Platform APIs. Catalyzed by the rise of AI, enterprises will need to further centralize their enterprise content and connect a single source of truth of content to their people, agents and applications. The same contract that an agent produces, a user may want to review inside of an end-user application and may want to show up inside of Salesforce or a custom app. The same is true for every other type of enterprise content from marketing assets to financial documents. To support these growing AI use cases, we're making it as easy and secure as ever to leverage Box as a platform to integrate content across the entire AI stack like Claude Cowork, Copilot, IBM watsonx, ChatGPT or custom agents that our customers build by leveraging Box's APIs, MCP server and CLI support. We're incredibly excited about this new array of use cases for the Box Platform to be used as the file system for agents. And we will monetize this through either end-user seats that interact with these agents or API and AI unit consumption when our platform is connected to these agents in a headless fashion. So we are covered either way. Now turning to go-to-market. As I've noted, we are incredibly excited about the momentum we're seeing with Enterprise Advanced. Across industries like financial services, legal, life sciences and in the public sector, including other key industries, we're seeing growing momentum for enterprises to adopt Box's most powerful set of capabilities with Enterprise Advanced customers now reaching 10% of revenue and driving an acceleration in our top line metrics. Our partner business also remains a critical part of our strategy as we deliver more advanced solutions for customers. And in Q4, we saw continued momentum with key partners, a large government regulator that selected Box Enterprise Advanced as the content layer for regulatory case management. Working with a global systems integrator, Box replaced a legacy system, enabling secure document intake, high-volume review and AI-assisted classification integrated into core case systems, positioning Box as a foundational platform for the organization. Next, a global insurance organization upgraded to Enterprise Advanced as part of a legacy ECM modernization led by our partner, DataBank. Box AI now processes insurance policies and related documents at scale, extracting key data from large volumes of policies and endorsements to support underwriting and quoting, reduce manual review and improve operational efficiency. Given the strong results we saw in FY '26 and especially through the tail end of the year, in FY '27, we believe it's critical to continue to strategically invest to build on this momentum and ensure we're capturing this market opportunity. We will continue to invest in our critical growth verticals with go-to-market capacity and marketing efforts. We're bringing the full power of Box's Enterprise Advanced plan to customers through Box's solution offerings in key lines of business and industries. We're accelerating growth in large enterprises by deepening partnerships with major SIs like Deloitte, Slalom, TCS, DataBank and more. We're driving growth with key cloud marketplaces like GCP and AWS and much more. You will hear more about these go-to-market initiatives at our Financial Analyst Day in 2 weeks. As we enter a new era of work that is defined by AI agents, we are confident in the power that enterprise content plays in powering an agentic strategy in organizations and that enterprises will need a secure platform to connect their most important enterprise information to their people, agents and applications. At Box, our opportunity has never been larger to transform how companies work with their content. We are entering FY '27 with the strongest momentum I've ever seen as we become the platform that powers intelligent content workflows and automation in the enterprise. With that, I'll hand it over to Dylan. Dylan Smith: Thanks, Aaron. Good afternoon, everyone. Q4 capped off a year of strong execution against the 3 financial priorities we outlined heading into the year. First, we set the stage to accelerate top line growth by investing in key go-to-market initiatives and enhancing the AI capabilities of our Intelligent Content Management Platform. Second, we generated efficiencies across the business by advancing our AI-first efforts and workforce location strategy. Finally, we executed on our disciplined capital allocation strategy, reducing basic shares outstanding by more than 3 million over the past year. In FY '26, we delivered revenue of $1.18 billion, up 8% year-over-year and up 7% in constant currency. We drove an acceleration in RPO growth to 17% year-over-year or 16% in constant currency. Operating margin came in at 28.3%, up 50 basis points year-over-year and up 40 basis points in constant currency. Finally, in FY '26, we generated record free cash flow of $313 million, up 3% year-over-year. Turning to Q4. We closed the year with very strong results, exceeding our guidance across all metrics. We delivered Q4 revenue of $306 million, up 9% year-over-year and up 8% in constant currency. This represents our third sequential quarter of accelerating revenue growth driven by strong AI and Enterprise Advanced momentum. Customers paying us at least $100,000 annually, grew 9% year-over-year. After launching Enterprise Advanced as our highest tier suite just a year ago, Enterprise Advanced customers already account for 10% of our revenue. The intelligent workflow automation, advanced AI and secure content management that this plan offers are clearly resonating in the market. Over the past year, price per seat for Enterprise Advanced customers have commanded an average pricing uplift of 30% to 40% over Enterprise Plus at the high end of the 20% to 40% uplift we had initially anticipated. Going forward, we expect this 30% to 40% uplift to continue. Total Suites customers now account for 66% of our revenue, an increase from 60% a year ago. We ended Q4 with remaining performance obligations or RPO, of $1.7 billion, representing 17% year-over-year growth or 16% in constant currency and providing us with greater visibility into future revenue. Short-term RPO grew 12% year-over-year, both as reported and in constant currency. Our strong RPO growth continues to benefit both from longer contract durations and from mid-contract upgrades to Enterprise Advanced. We expect to recognize roughly 55% of our RPO over the next 12 months. Q4 billings of $420 million, were up 5% year-over-year and up 4% in constant currency, ahead of our expectations of low single-digit billings growth. This outperformance was driven primarily by strong Q4 bookings. We ended Q4 with a net retention rate of 104%, up from 102% in the year ago period, driven by continued improvements in both pricing and net seat expansion trends. We expect our net retention rate to remain at 104% in Q1 and to land in the range of 104% to 105% at the end of FY '27. Q4's gross margin was 82.3%, exceeding our guidance of 82%. This represents an increase of 130 basis points year-over-year. In Q4, we continued to drive cost discipline across the business, delivering record Q4 operating income of $94 million and operating margin of 30.6%, exceeding our guidance of 30%. In Q4, we delivered EPS of $0.49, well above our guidance of $0.33. This includes the benefit from several tax items, which reduces our effective tax rate in FY '26 and on a go-forward basis. Excluding these tax benefits, EPS would have exceeded our guidance by $0.02. I'll now turn to our cash flow and balance sheet. In Q4, we generated free cash flow of $98 million and cash flow from operations of $110 million, up 7% and 8% year-over-year, respectively. We ended Q4 with $480 million in cash, cash equivalents, restricted cash and short-term investments. Our balance sheet reflects the cash settlement of debt principal related to our $205 million of 2021 convertible notes that matured on January 15, 2026. In Q4, we repurchased 4.4 million shares for approximately $126 million. For the full year of FY '26, we repurchased approximately 9.7 million shares for approximately $293 million, representing more than 90% of FY '26 free cash flow generation. As of January 31, 2026, we had approximately $59 million of remaining buyback capacity under our current share repurchase plan. With that, let me now turn to our Q1 and FY '27 guidance. Please note that approximately 40% of our revenue is generated outside of the U.S. with approximately 65% of this international revenue coming from Japan. Note that our FY '27 guidance reflects a lower expected GAAP and non-GAAP tax rate benefiting EPS. For the first quarter of fiscal 2027, we expect Q1 revenue to be approximately $304 million, representing approximately 10% year-over-year growth or 9% in constant currency. We anticipate our Q1 billings growth to land in the low single digits, which includes an expected headwind from FX of approximately 530 basis points. We expect Q1 gross margin to be approximately 81.5%. We anticipate our Q1 operating margin to be approximately 27.5%, up 220 basis points year-over-year. We expect Q1 EPS to be approximately $0.36. Weighted average diluted shares are expected to be approximately 141 million. For the full fiscal year ending January 31, 2027, we expect our full year revenue to be approximately $1.275 billion, representing 8% year-over-year growth or 9% in constant currency. We expect our FY '27 billings growth rate to be roughly in line with revenue growth. This includes an expected headwind of approximately 100 basis points from FX. We expect FY '27 gross margin to be approximately 81.5%. We expect our FY '27 operating margin to be approximately 28% or 28.5% in constant currency. As we have discussed previously, given the momentum and demand we are seeing for Box AI and Enterprise Advanced, we are continuing to invest in strategic go-to-market initiatives to ensure we can reach customers at this critical technology juncture. We will continue to drive operating efficiency through cost discipline, AI-driven efficiencies and our workforce location strategy, and we remain committed to delivering significant margin expansion over the next few years. As it relates to FY '27 expense and margin seasonality, please note that our annual customer conference, BoxWorks, will take place in Q4. This will shift approximately $3 million in expenses from Q3 into Q4 as compared to FY '26. We expect FY '27 EPS of approximately $1.55 or $1.58 in constant currency. Weighted average diluted shares are expected to be approximately 141 million. In the era of AI agents, Box is powering the full lifecycle of content in a single platform with native enterprise-grade security and AI capabilities. Our strong results in fiscal 2026 demonstrate the success of this strategy, including an acceleration in RPO growth and an improvement in our net retention rate. In FY '27, we will continue to invest in our robust product road map and strategic go-to-market initiatives, delivering accelerating revenue growth and higher operating profit. We look forward to providing more details at our Financial Analyst Day later this month. With that, Aaron and I will be happy to take your questions. Operator? Operator: [Operator Instructions] We'll take the first question from Steven Enders, Citi. Steven Enders: Okay, great. I guess I just want to start on the opportunity for threat that you're maybe seeing from AI. And just how do you think about how the changes in the GenAI landscape, maybe impacts the content layer and what this looks like moving forward with agentic AI? Aaron Levie: Yes. So -- thanks for the question. So we're -- as you can tell on the kind of remarks, we're unbelievably excited around the role that content plays in any kind of agentic system. And so there's a few different ways that this will show up. The first is we actually expect to see a major rise of software in general being generated through AI. So if you just imagine that there's a dramatic increase in software that enterprises build, I don't 100% agree with the thesis that they'll build kind of existing in internal systems, but kind of almost independent of what you believe, there's going to be vastly more software produced in the future, sometimes bespoke software, sometimes just more companies. And for really any kind of enterprise use case, the second that you need some form of unstructured data inside that software. It could be a contract management system. It could be a pharma workflow. It could be a financial services onboarding system. It could be a client portal. All of those systems are going to need a secure place to be able to store the unstructured data that goes into that system. So the first piece is more software is just good for us because all of that software needs to eventually probably touch some type of unstructured data in an enterprise context. But probably the bigger play is as you have more and more agents doing work for us, and we've seen a few examples of agents kind of break through recently, the Claude Cowork agent, OpenClaw agent, these are great examples of agents that are doing kind of general-purpose knowledge work. And if you imagine the general-purpose knowledge work that most people do through their day, if you're a lawyer, you're looking at contracts; if you're in banking, you're looking at lots of financial reports; if you're in pharma, you're looking at lots of both research and kind of information coming in from lab tests. All of that is unstructured data. To now replace a person with an agent in that example, and agents will need that exact same data to work with. They're going to need the right contract to look at. They're going to need the pharma research to touch. They're going to need to be able to comb through financial information. And the enterprise is going to want a secure way to govern those workflows and govern the data that goes into them. If you imagine one of the kind of increasing kind of architectures emerging is these agents that have their own computers that they get to work with. Well, the computer will, to some degree, be stateless at some point, like it might disappear in a week or a month or a year from now. But what can't disappear is the data that, that agent worked on. If you're in a regulated industry, you need to govern that data. You need to be able to have audit logs, you need to be able to have a place where you store and can go do discovery on that information. So the part that actually has to keep state forever up to the point that the customer cares about working with the data is your -- is the information that, that agent worked with. And so we really imagine a world where, let's say, you have 10 or 100 or 1,000x more agents than an enterprise, than people even, they will need to do work on this unstructured information. And importantly, when they do that work, oftentimes, an end user will actually need to see the results of that work or go back and forth with the agent. So fundamentally, there needs to be some type of shared file system for them to be able to do that work. And that's why we are in a very strong position as a platform for both agents and applications, both of which will grow due to AI to be able to manage that content. So that's our overall take. We're seeing this kind of thesis continue to kind of play out in the market. You're going to see a number of developer tools launching over the coming days and weeks that will further support developers that are building on this, but this is directly what we're seeing already from our customer base and developer base. And so we're just excited to continue to make that as frictionless as possible and continue to kind of pour fuel on that fire. Steven Enders: Okay. No, that's great to hear. Maybe just on the Enterprise Advanced success so far. I think it's good to see at a 10% of rev already so quickly. Just maybe kind of what are your expectations for what that will look like for -- or where that is going to end up in fiscal '27, like what do you have embedded in the guide? And just yes, how are you kind of viewing the, I guess, seat uplift so far from customers that have taken on the Enterprise Advanced tier? Dylan Smith: Yes. So I would say certainly very excited about the momentum that we're seeing in Enterprise Advanced and just scratching the surface of the opportunity. We do expect to see that continue to drive a lot of the growth for -- in the year ahead. And we'll give more details in terms of what we're thinking and expecting around that momentum, not just for next year, but in the coming years in just a few weeks at our Financial Analyst Day. And then in terms of the type of impact that we're seeing from customers, we mentioned we've been really pleased with just how much the value of these newer capabilities are resonating with customers. So we have been seeing pricing uplifts even just from Enterprise Plus to Enterprise Advanced in that 30% to 40% range alongside a lot of the use cases that Enterprise Advanced is enabling being a catalyst and one of the reasons that we're seeing healthy dynamics around net seat expansion as well. So a lot of different benefits in terms of not just the top line growth, but the underlying customer economics and stickiness that is driving, which is one of the reasons that we're so excited about the path forward and the growth opportunity that creates. Operator: The next question is from Rishi Jaluria from RBC. Rishi Jaluria: Wonderful. Maybe I want to start, Aaron, in your prepared remarks, you talked a lot about many of the verticals, especially regulated verticals where you're helping enable a lot of these AI use cases. Can you talk a little bit about kind of the state of enterprise AI adoption and the willingness to take AI from pilot and proof-of-concept into more widespread production and what you're seeing specifically out of more regulated industries? And then I've got a quick follow-up. Aaron Levie: Yes. So great question. Obviously, I think right now, you have a bit of a tale of 2 cities with AI adoption. You have a lot of these sort of deep engineering use cases, AI coding, et cetera, that have obviously taken off because the very users of these platforms are technical, they can adopt their own tools. The communities are pretty wired together. And then you have sort of, let's say, the rest of knowledge work. And in the rest of knowledge work, I think what it often takes is applied use cases with AI that can actually bring real transformation to the workflow. There's -- I think at this point, it's safe to say every knowledge worker has some degree of access to a chat tool either personally or professionally. And so general purpose, I'm asking the Internet or some systems questions is I think increasingly growing. The real interesting part is can I actually go and automate and accelerate and augment my workflows in an organization. So with Enterprise Advanced, this is really an applied system for how do you bring AI and AI agents to enterprise content workflows. The biggest one that has taken off thus far is really data extraction. So you have a large repository of contracts or invoices or financial data and you want to be able to extract key details from that and then kick off some workflow or pump that data into a data lake and then query it or query it within Box. We are seeing a lot of growth in those use cases right now. There's -- as I kind of mentioned on the call, we have a new product called Box Automate that is coming. We shared this with customers at the tail end of last year. Box Automate is sort of one click above data extraction, which is I might want to sort of design an entire workflow, a client onboarding process, a contract process, a digital asset review process. And at multiple steps in that process, I want agents to do certain amounts of work dealing with content. And so now we move from really kind of task-specific applied use cases to really increasingly more of the full business process with both agents and people kind of showing up at the relevant point. But we are 100% focused on applied AI use cases in an organization. And that's, I think, why we're seeing healthy adoption of both Enterprise Advanced as well as in regulated industries, maybe ones where it wouldn't have been maybe initially intuitive that they would be able to adopt so quickly. It's because these are applied use cases and our platform is purpose-built for security, compliance, data governance issues that they're going to run into with AI. Rishi Jaluria: Yes, got it. That's really helpful. And then, Dylan, for you, just maybe a bit more of a housekeeping. But as you talked about your Q1 billings guide, you talked about FX as a -- correct me if I'm wrong, 530 basis point headwind to growth. That seems a little bit high, especially in light of the rest of your kind of as-reported and constant currency growth rates. Can you expand a little bit on just kind of the math behind that and why the headwind from FX is so extreme in Q1? Dylan Smith: Yes. So if you look back to a year ago, there was just a pretty significant movement in the U.S. dollar to yen exchange rate in that period. That's one of the reasons, also if you look at our Q1 results from this past year in FY '26 was really the reverse story and was one of the contributing factors to extremely strong billings growth. So it really is a unique to just the movement that we saw in that exchange rate a year ago. And for the year, much more normalized. So you did hear that right in terms of the 530 basis point headwind for Q1. For the year, we expect FX to be a roughly 100 basis point headwind to our billings growth rate. So definitely a pretty unusual dynamic just in the first quarter based on those rate movements a year ago. Operator: We'll take the next question from Brian Peterson, Raymond James. Brian Peterson: Congrats on a really strong quarter. Dylan, I'd love to understand as you went through the quarter, any help on how you're thinking about linearity demand? And any perspective from a geo in terms of Japan, North America, anything you can call out there? Dylan Smith: Do you mean linearity in terms of what we saw within the fourth quarter? Brian Peterson: Yes, 2 parts, sorry. Yes, for the fourth quarter, but 2 parts. I would love to understand just the general linearity as you went through the quarter and anything you would call out in terms of strength by geo? Dylan Smith: Yes. So linearity was really positive, both because I think the team has done a really nice job in terms of driving that and not letting everything sit to the last days or weeks of the quarter, which also gives us more cycles to bring in some of those deals, drive some of that upside, and that was certainly a contributing factor to the underlying bookings strength and outperformance that we saw. And at the same time, which also touches on your second question, we have seen a nice strength and really good momentum in the performance of our commercial business. So SMB, mid-market. And that is just inherently more linear typically than enterprise within the quarter. And so seeing that strength also contributed to the strong linearity that we saw. And then on top of those segments, again, Japan was a strong performer for us. And then we have seen some of the regions in the U.S. really starting to hit their stride as well. But no really unusual trends in terms of what we've seen over the past year other than just continued and additional strength on the commercial side, but everything, just a higher overall level of performance across those different segments. Brian Peterson: Got it. And Aaron, maybe one for you. You talked about some of the different end markets that might be coming to Enterprise Advanced. I'd love to maybe understand how do you think about the evolution of that ramp in terms of selling into the customer base, but also maybe coming in with net new to Enterprise Advanced. And I don't know if you guys can share of that 10%, how many came in kind of migrating from the existing base or net new, but would love to unpack that a bit. Aaron Levie: Yes. I mean Enterprise Advanced sets us up very nicely for net new conversations because it's getting you into a workflow conversation and in particularly an agentic workflow conversation. So you could have -- never had run into a use case that we previously would have been able to solve for you with Box, and we can come into your organization and instantly have a conversation around being able to start to drive automation in some process that, again, maybe 2 years ago, we'd have no ability to play in. So this could be a contract automation process, a client onboarding workflow where we're doing more of the intelligence. It could be in a healthcare data processing workflow. We have customers where we've had conversations where they want to rip and replace a legacy ECM system and maybe they were starting to kind of figure out can they migrate that to the cloud or build out their own capability and then all of a sudden, they kind of see the full depth of data governance, security compliance that they're going to need, especially in a world of agents and decide that actually Box is going to be the superior, more future-proof solution for that. So in all of these examples, Enterprise Advanced is kind of putting together a package between workflow, no-code apps, AI agents and sort of metadata extraction, all backed by a level of data security with Shield Pro and other capabilities that allow you to move your mission-critical work and content to Box. So we're seeing that again in a wide range of new logos as well as existing customer upsells. Operator: Matt Bullock from Bank of America has the next question. Matthew Bullock: Great. I wanted to ask about net revenue retention expectations. It looks like it's going to improve modestly in fiscal '27. But I'd be curious to hear if you could unpack the components of that across pricing per seat benefits, net seat expansion. And then it sounds like APIs and units are going to start coming into the model as well this year. I presume only marginally, but could that be something like 50 basis points of tailwinds to NRR this year as we progress towards that longer-term target of 1 to 2 points of growth from platform? Dylan Smith: Yes. So in terms of drivers of the net retention rate, yes, both for the coming year and then the additional improvement that we expect to deliver in the coming years, we would expect to see that coming from the combination of slightly higher impact from pricing uplifts and continued momentum with net seat expansion being more of a driver, which is a change from looking back to a year ago, that was more so being driven by the pricing side, but we're now seeing and expecting to see more kind of healthy mix between the 2 with no expected change on the full churn rate on that side. And then in terms of the overall platform business, yes, we could see that certainly contributing to the net retention equation and part of the overall pricing dynamic and that uplift that we'd see there. But to your point, at least for the coming year, I don't expect that to be a material driver of any change in the net retention rate. Matthew Bullock: Got it. Really helpful. And then just one quick follow-up, if I could. I wanted to ask about Enterprise Advanced pricing uplift. You've seen consistent 30% to 40% uplift relative to Plus, already at 10% revenue mix here, and you're innovating quite a bit. So my question is, do you foresee the pricing uplift for Enterprise Advanced potentially ticking above that 40% kind of baseline that it's tracked at so far over the next couple of years as you continue to add value? Dylan Smith: I would say you probably wouldn't set the expectation to see that move up too much in terms of the core upgrade from Enterprise Plus to Enterprise Advanced. Certainly, what we're driving is to deliver more of an overall contract value increase when customers make that move through the combination of just increasingly monetizing those platform components that we've been talking about as well as and kind of in conjunction with opening up the new use cases to drive more seats because that 30% to 40% uplift is really specific to the apples-to-apples, hey, you have X seats and now they're moving to Enterprise Advanced, what's the price per seat? Don't expect to see as much of the upside from the success and innovation of Enterprise Advanced show up in that specific metric, but more in the overall contract value through those other kind of related levers. Operator: The next question will come from Lucky Schreiner, D.A. Davidson. Lucky Schreiner: Maybe a unique one. But over the course of the year, did you notice any difference in behavior between the early adopters of Enterprise Advanced versus customers that maybe adopted in 4Q, just given the vast improvements in the models that we've seen over the course of 2025? And any way we should maybe be thinking about that for 2026? Aaron Levie: And when you say the models, i.e., AI models, right? Lucky Schreiner: Correct. Yes, and some of the agentic abilities that you guys can provide on the platform. Aaron Levie: It's a great question in terms of how you're characterizing it. I don't know that I could pinpoint -- I don't know that I would pinpoint any specific thing, but the general trend that is sort of embedded in that question is actually correct, which is, if I go back, let's say, 14 months ago when Enterprise Advanced initially kind of hit the scene in conversations, there were still lots of use cases in mission-critical workflows where you would have to do a lot of work to make sure that the data extraction was as accurate as you needed. And as each model family kind of has its next upgrade in its lineage, we tend to see anywhere from single-digit to double-digit percentage points in accuracy and kind of quality of the models on unstructured data. That's just universally a good thing for us because it means there's even more swaths of use cases that we can go after and say, "Hey, we can go and extract critical metadata from those even more complex contracts or financial documents or assets that you have." So I'd say the general trajectory, again, without pinpointing Q4 specifically is that customers will get more and more comfortable automating more and more of these content workflows as these models continue to improve, and we're already seeing that trajectory take off with our conversations. So it's a fantastic, just like universally good trend for us that we're going to keep riding. Lucky Schreiner: Awesome. That makes a lot of sense. Then on the Enterprise Advanced customers, congrats on the 10% of revenue. That's impressive. If I look at the percent of revenue coming from Suites, that implies nearly all of the revenue came from upgrades from Enterprise Plus customers to Enterprise Advanced, which makes a lot of sense. But is there anything about the non-enterprise Plus customers that might be slower to upgrade to the higher tiers? And maybe how are you thinking about that opportunity? Dylan Smith: Yes. I think that's right that the majority of the Enterprise Advanced customers who have upgraded were coming from existing customer base and more likely than not coming from Enterprise Plus and I wouldn't say there's anything unique about the types of companies, whether it's company size or any unique dynamics by the actual company. But just from a use case point of view, certainly, those customers who would be more already bought into the value of Box's platform offerings and who have a lot of the use cases that would benefit the most from Enterprise Advanced capabilities, as you'd expect and especially from an early adopter stage, there's pretty strong correlation with those customers who are already on Enterprise Plus, which was previously our highest tier offering. So that's really, I would say, a function of timing and the specific customers who are almost -- it's almost a self-selecting if you're one of the early adopters of Enterprise Advanced, more likely than not, you're on Enterprise Plus. But we see a huge opportunity for those non-enterprise Plus customers just given the types of use cases, the types of conversations we're having and the potential there as well. So more of a timing thing than anything else is what we'd point to. Lucky Schreiner: Got it. Appreciate the color there and congrats on a record year. Operator: Next up is Jason Ader from William Blair. Jason Ader: Aaron, I wanted to give you the opportunity to address a couple of the bear narratives out there for SaaS. First is the fear that SaaS apps become back-end databases on which an intelligence layer like Claude sits and captures much of the value. And then second, the seat-based models face structural challenges because of knowledge worker job displacement. Aaron Levie: Yes. So -- and this might sound like a little bit of the first question, but we're -- I don't -- the -- there's almost nothing in that, that is bad for Box, I guess, ironically. I don't necessarily totally believe some of those components, especially the kind of future of knowledge work and the volume of that. I think that most people are going to use AI to accelerate their work and augment their work -- kind of workforces. But what we are building as a platform is when you have critical information, contracts, research data, marketing assets, HR files, financial documents, all of that content is going to need to be shared between agents, people and systems or applications. There's simply no way around it. You can't have 2 agents that are maybe trying to coordinate a task for a lawyer be working off of 2 different sets of contracts. They fundamentally would need the same access to data. So you need a shared file system. That shared file system has to be accessible to your agents and your people. And maybe the ratio changes over time of different kind of roles in the economy in different parts. But no matter what, there'll be some human in the loop at some part. So then the data has to be shared with a person. And ultimately, that company is going to need to have the same governance, the same security, the same controls on that information as they did with people. So imagine that you're a large bank and your bank is processing escrow documents or loan kind of files from a client. That data will have to be governed just like when people went and review those documents. They're going to need to sit around for 10 years in some cases. You're going to need to see the exact traces of what the agent did and what decisions they made in that workflow. Well, all of that is unstructured data. It will all become content, whether it's markdown files or PDFs or word documents, that's all enterprise content that has to be secured and governed and controlled and protected in the exact same way that we've always been doing it because files are the sort of this natural medium by which people and agents share information. So I would just say that our platform story becomes really increasingly the core of how we can power both, again, agents, applications and people. And so in a scenario where you have maybe a seat decline because agents have grown so much, which, let's say, let's positive is some potential scenario, the agents that are growing on the other end of that still need a place to then store their documents and their enterprise content. And then I don't know if you heard this answer, but if you have more and more, let's call it, vibe-coded software or SaaS, those systems still also need repositories for being able to secure and protect and govern the content that gets generated. And we already have a business model for that. That's our platform business model. So we can grow either through platform consumption or we grow through continued seat adoption, both of which we're seeing right now in the business. And so I think we're kind of protected on both dimensions there. And it's really, again, because of the critical nature of how companies need to manage this information. You need data governance, you need data security, you need compliance, you need data residency. None of that can go away in a world of agents. And in fact, probably it becomes more important in a world of agents because if you have 100x more agents running around doing loan processes than you had people, the chance of a mistake happening, the risks of an agent revealing the wrong piece of information to a client goes up exponentially. Those agents don't have context for what they should or shouldn't be sharing. It's very easy to prompt inject those agents. There's a lot of risks that can emerge. So you need to give them isolated environments, but those are isolated environments that need some degree of controls and mechanisms and in many cases, kind of collaboration with the user. So that's what we're powering. That's what our platform has always done for humans and for applications, and now we're adding agents into the mix. And why we see this as, again, just universally a good thing. So I think maybe the one thing where we sit around and we look at Claude Cowork and we see OpenClaw, like we are just incredibly happy for the existence of these things. We were a Claude Cowork partner on their plug-ins like the more knowledge work that happens agentically, it's all goodness for us. It just creates a tremendous amount of data that needs to get stored somewhere securely. Jason Ader: Okay. Awesome. And then -- sorry, just a quick follow-up. Could you just talk about the API monetization opportunity in relation to that answer that you just gave? Aaron Levie: Yes. So there's a couple of parts of the API monetization. So there's a pure volume-based mechanic. So if you were to use Box tomorrow and you deployed a fleet of agents, and they were all running around, you had 100x more agents than people in your organization. And each of those agents, you would probably want to have a Box account of some sort. You can either have a headless Box account, you have a regular Box account you choose. And you're going to want those agents to be writing, reading, storing data, sharing with other people. And if it's done in a headless capacity via our APIs, we have a platform business model, which is consumption-oriented. And so you'll just pay for the API calls that go into that. Then if you use our direct intelligence layer, which taps into Claude and ChatGPT -- and GPT-5.2 or any new model, Gemini 3, then we also monetize that through AI units. And so we've got dual consumption monetization levers that will basically grow somewhat correlated with just the growth of AI agents in the economy, assuming our customers are deploying those capabilities. And then, of course, seats still -- like we're still relatively early on total seat penetration. And so there will actually be a scenario where seats will grow because of agent growth because we will then tap into use cases that we didn't previously solve where there still will be a human in the loop working with agents, but now we're able to capture more of those use cases than we would have for that particular knowledge worker 5 years ago. And so there's sort of just -- it's multifaceted sort of growth levers. But it's like the simple -- like if you just had to like -- be like, okay, what's the simple concept here? It's that agents use files. That is their core thing that they work with. Every time you hear any viral thing online about an agent, storing off its work, creating a memory, having documentation, having a specification to work off of, it's always a file. And so that -- those files are going to get generated. They're going to need to get stored somewhere. They're going to need to be governed. They're going to be shared with people. And so that is just the general sort of tailwind that our platform is going to be able to support. Operator: And Seth Gilbert from UBS has the next question. Seth Gilbert: I guess for the first one, you had the best greater than $100,000 customer growth in about 11 quarters. So the question is on the customer adds front. Can you help us expand on where you're winning? Is it Enterprise Advanced, other SKUs, other parts of the business? And then I believe someone else asked on the split of Enterprise Advanced new versus existing logos, but I'm not sure I caught the answer. Maybe you can expand there as well. Aaron Levie: Yes. I would say the 100,000-plus customer count growth is very much directly driven by the sort of overall set of capabilities that are either a part of Enterprise Advanced or customers that are now getting more involved in our platform because they kind of see us obviously on the right side of this AI curve. And actually, it's interesting, the neutrality piece, we haven't talked about too much on this call, but it's sort of somewhat timely in this idea that at any given moment, you might want to use a different AI model for a different capability in your enterprise. And you don't want to be moving and shuffling around your content depending on that use case. And so that's another benefit that you get with our overall platform. And so there's a lot of these sort of strategic tailwinds where our platform is positioned. And so some customers might buy our platform, not yet Enterprise Advanced, but they're buying it because they recognize the sort of importance of many of these aspects of our platform overall. And so that's also helping drive the growth. But Enterprise Advanced very much emphatically is helping lift that number up, and we're seeing it just kind of across industry right now. Seth Gilbert: Got it. That's helpful. And then maybe as a follow-up, as you're marching towards the long-term guide of double-digit top line growth, margins are remaining roughly flat for 2027 -- FY '27. I understand the drivers of these flat margins, but maybe you can talk about what has to happen for margin expansion in the future. Do we need to see top line growth above 10% to get margin expansion or maybe there's some efficiencies on the S&M and R&D side that will kind of percolate through once the investment phase next year has taken shape? Dylan Smith: Yes. So I would say there's nothing -- no required growth rate to be improving operating margin at a greater clip versus the kind of incremental improvement in constant currency that we're expecting to deliver this year. This year, really, as we've talked about, is about doubling down and making sure that we invest to capture the market opportunity, just given where we are in the market evolution. So most of those investments on the sales and marketing side. But if you look back over the last few years, we've generated significant margin expansion even while growing in the single-digit range. And so in addition to all of the opportunities and efficiencies that we're driving around kind of how we're deploying AI internally, including with Box's own product, some of the same areas that we've been driving operating margin up into the high 20s are the same things that are going to get us the next several points of growth. So that's things like continuing to take advantage of our lower-cost workforce location strategy, a lot of the other areas that we've invested in that are generating stronger returns, whether that's with Salesforce productivity, the ROI of the marketing programs or just as a lot of these core strategic go-to-market investments mature, those will be able to generate more leverage as well, including through our partner ecosystem. So really, a lot of things across the board, but would really frame the operating margin and lower rate of improvement in the current moment more as a strategic decision to put more dollars toward growth versus anything about the model itself. Operator: And everyone, at this time, there are no further questions. I'd like to hand the conference back to Cynthia Hiponia for any additional or closing remarks. Cynthia Hiponia: Great. Thank you, everyone, for joining us. And to drill down deeper on our strategy and financial model, we are hosting a Financial Analyst Day on Thursday, March 19. Please go to our IR website to register. And hopefully, we'll see most of you there in person in New York. Thank you very much. Operator: Once again, everyone, that does conclude today's conference. We would like to thank you all for your participation today. You may now disconnect.
Operator: Hello, everyone. Thank you for joining us, and welcome to the Genius Sports Limited Fourth Quarter 2025 Earnings Results. After today's prepared remarks, we will host a question-and-answer session. To withdraw your question, please press 1 again. I will now hand the call over to Brandon Bukstel, Head of Investor Relations. Please go ahead. Brandon Bukstel: Thank you, and good morning. Before we begin, we would like to remind you that certain statements made during this call may constitute forward-looking statements that are subject to risks that could cause our actual results to differ materially from our historical results or from our forecast. We assume no responsibility for updating forward-looking statements. Any such statements should be considered in conjunction with cautionary statements in our earnings release and risk factor discussions in our filings with the SEC, including our annual report on Form 20-F, filed with the SEC on 03/14/2025. During the call, management will also discuss certain non-GAAP measures that we believe may be useful in evaluating Genius Sports Limited's operating performance. These measures should not be considered in isolation or as a substitute for Genius Sports Limited's financial results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most directly comparable U.S. GAAP measures is available in our earnings press release and earnings presentation, which can be found on our website at geniussports.com. With that, I will now turn the call over to our CEO, Mark Locke. Good morning, everyone, and thank you for joining us today to discuss our Q4 results. Mark Locke: On today's call, we would like to cover three topics. First, we will take a moment to highlight the strong Q4 and full-year results, which we preannounced last month. There are two main takeaways from our 2025 results. Revenue growth of 31% is our strongest annual increase since 2021, and our full-year 20% EBITDA margin is our highest annual margin. Second, both the betting business and the media business are on great footing, which enables us to reaffirm our 2026 guidance of continued top-line growth and margin expansion, exactly in line with what we communicated on the Investor Day in December and preannounced last month. And finally, I want to provide additional perspective on our recently announced acquisition of Legend, addressing directly the key questions raised by investors and discussing the confidence we have in the financial and strategic rationale of the transaction. I will come back to this later in the call. But first, I will turn to Bryan to discuss our financial results. Bryan Castellani: Thank you, Mark. First, we achieved group revenue of $669 million in 2025, representing 31% growth, as Mark said, our strongest annual increase since 2021. This translated to $136 million of group adjusted EBITDA, representing a 20% margin, also, as Mark highlighted, our highest annual margin as a public company. Group revenue growth was well balanced across betting and media. Betting revenue increased 33% in 2025, marking its strongest year since 2021, our first year with exclusive NFL data rights. Our strong betting revenue was primarily driven by growth with existing customers, who benefit from the increasing suite of innovative products such as BetVision, which is now available for NFL, Serie A, FIBA Basketball, and dozens of other soccer, tennis, and esports competitions. BetVision is consistently increasing engagement and driving greater in-play wagering for our sportsbook partners, so we are excited to continue expanding our coverage. 2025 marked another strong example of our ability to outpace the 24% growth of global online sports betting GGR, further demonstrating our consistent and predictable commercial model. Our Media business delivered a strong performance in 2025, increasing 37% to $144 million. This represents our strongest annual growth since 2022, supported in particular by execution in the second half of the year, where revenue nearly doubled compared to the second half of 2024. While our fourth quarter delivered exceptional results, we do not expect that exceptionally high growth rate to continue. The second half benefited from a combination of new partner launches and market conditions that created a particularly strong comparison period. As a reminder, we are also making certain changes in how we recognize revenue in the Media segment, transitioning some arrangements from gross to net reporting. This will impact reported top-line growth rates but is expected to improve our margin profile and better reflect the economics of those contracts. We continue to partner with some of the world's largest advertising agencies including PMG, Publicis, and most recently WPP. We are also partnering with the largest independent supply-side platform, Magnite. This partnership embeds our real-time sports signals directly into Magnite's platform, allowing advertisers to activate against official, real-time sports moments inside a scaled programmatic infrastructure. Importantly, this places Genius Sports Limited directly in the flow of billions of dollars in advertising spend. Additionally, we recently partnered with NBC Sports regional networks to power AI-driven augmented advertising across 600 live NBA games. Genius IQ turns real-time moments into premium, data-driven sponsorship inventory integrated directly into the broadcast. As you can see, Genius Sports Limited is deeply embedded in the media infrastructure, controlling several of the monetization layers within live sports, a category that has quickly become a priority for the biggest brands and agencies. Overall, we are encouraged by the momentum in media and the progress we have made in demonstrating performance outcomes for partners. And lastly, it is worth highlighting the diversified growth by geography. While the Americas accounted for most of our growth this year, up 41%, our established European markets also delivered strong performance, with growth exceeding 20% in 2025, up from 15% in 2024. We expect this momentum to continue into 2026. As we said last month, we expect the organic business to generate between $810 million and $820 million of revenue and $180 million to $190 million of adjusted EBITDA. This represents growth of 22% and 36%, respectively, right in line with the expectations from our Investor Day, and balanced across betting and media. On a related note, beginning in 2026, we will report revenue across two product groups, betting and media, which more closely reflects how we operate the business today. Our existing Sports Technology revenue will be allocated across these groups based on a thoughtful assessment of where each technology application is best suited to sit. To support this transition, we have included historical quarterly financials in the appendix recast under the new reporting structure. And finally, we expect the addition of Legend to be immediately accretive to this guidance post close in Q2 of this year. On an annualized basis, we expect the combined entity would achieve group revenue of $1.1 billion, group adjusted EBITDA of $320 million to $330 million, with group adjusted EBITDA margin of approximately 30% and free cash flow conversion of approximately 50%. This is an acceleration of our financial targets by two years. And on that note, I will now turn the call back to Mark to discuss Legend in more detail. Mark Locke: Thanks, Bryan. Before we conclude, I want to speak clearly and directly about our acquisition of Legend. Legend is not simply just a media business. It is a technology company that is built around large, loyal sports and iGaming audiences. Legend operates an audience monetization platform that is built off of two decades of technological investment. This is where the value of Legend's business is. Legend's tech engine captures how users engage with content in real time. This content is not static information pages. They are environments that are built for participation around live sports and gaming experiences. For example, a user may analyze real-time data in a community discussion around a major sporting event, repeatedly explore new online casino titles, demoing the ones that best suit their taste, or follow specific personalities tied to teams or games, celebrating the latest win or jackpot. These actions ultimately generate rich signals of intent inside environments designed for repeat interaction. Legend uses these signals to continuously upgrade the experience and recommend personalized transactions. When a user ultimately completes the transaction with a gaming operator or bookmaker, that outcome feeds back into the system. Over time, Legend's models get better at understanding which engagement patterns lead to action and Legend can rapidly optimize commercial models. That feedback loop is where long-term value is created. It is not about answering factual queries. It is about facilitating participation inside owned environments and continuously improving the economics behind it. This technology is the result of 20-plus years of and data training and over $300 million of invested capital. Outside of Legend's own properties, the application of this technology carries enormous value to third parties. In one example, a well-known brand in the gaming integrated Legend's software into its own digital properties and within six months experienced a 50% uplift in revenue from higher conversion. This plug-and-play model is also proven with brands like Sports Illustrated and Yahoo Sports, just to name a few. When combined with the reach and distribution of Genius Sports Limited's network across the sports ecosystem, this can potentially be scaled and replicated hundreds of times. More on this later when we would discuss revenue synergies. The value of this technology is further enhanced by engagement metrics on slide 12. Legend has created a natural, organic destination for high-quality users who deliver long-term value for operators. In fact, one of Legend's top customers, a well-known global operator, has reported that customers acquired through Legend have a 60% higher value after one year compared to all other customer acquisition channels. Because of the value that Legend delivers to its customers, they command premium economics. There are four key components of its commercial model. First is sponsorship and ad placement. Operators pay a premium to have prominent placement on Legend's properties because they want to be up front and center to reach high-intent users. Second is upfront commitments. When a user makes a first deposit, Legend gets paid. Third is revenue share. Legend delivers quality users with long-term value. Once acquired, Legend shares in the operator's revenue from those users every time that they play the casino or bet on sports, and in many cases, Legend shares its revenue in perpetuity through lifetime revenue share contracts. This results in high-quality, predictable, and recurring revenue. Next, I want to be explicit about the comparison to traditional affiliate businesses. We understand that the word affiliate has been the simple default comparison, but that framing misses what actually drives Legend's model. The key issue is not the monetization label. It is traffic durability and depth of engagement. Traditional affiliate models rely heavily on SEO and paid marketing, often spending between and 40% of revenue to sustain traffic. Legend spends approximately 5% because its traffic is direct and repeat. Engagement is technology-driven, optimized in real time, and built on owned environments. That creates durable economics. The metrics very clearly speak for themselves. Look no further than the data sourced from SimilarWeb comparing session depth and session time across Legend properties. As you can see, this level of engagement is more comparable to a booking.com or FanDuel rather than a simple odds comparison website or even the digital property of the most popular sports leagues. Again, we will revisit this when discussing revenue synergies. The last point that I would like to address is the risk of disruption from AI LLMs or changing search algorithms. This is yet another key difference from a traditional affiliate business, which often rely heavily on search engine. If search visibility changes, their traffic can disappear. Legend is different. Engagement is recurring. Revenue is diversified across operators and geographies and tied to lifetime value, not one-off clicks. The economics are built on participation, not page views. That participation takes place across a wide range of experiences, everything from tournaments to live dealer streams, community engagement, and more. These are all deep, immersive experiences that cannot be replicated by LLMs. So if you believe AI will make this kind of business obsolete, you should consider this. AI actually makes this model more valuable, not less. As LLMs commoditize information retrieval, competitive advantage shifts to owning environments where 118,000,000 users actively participate and to the proprietary intent signals that those interactions generate. Generic answers are free. Proprietary behavioral data is not. Over the past decade, digital businesses have moved from monetizing attention to capturing intent. Advances in AI accelerate that shift, enabling better prediction, deeper personalization, and more efficient commercial outcomes. In sports and iGaming, this transformation is now happening in real time. Legend operates at the precise moment when participation turns into action. Based on this, we are very confident in Legend's proven business model. Our 2028 guidance is underpinned by the predictable operating leverage and increasing cash flow that both Legend and Genius Sports Limited can achieve independently. The combined business is expected to sustain 20% revenue growth, strong EBITDA margins, and over 50% free cash flow conversion, and growing. A financial profile that is rare in public markets. And this is before we account for any synergies. We have identified four specific revenue synergies that we believe are executable immediately post close and capable of driving incremental upside beyond our 2028 increased guidance. The first is customer cross-sell. Genius Sports Limited's official data rights and product suite will sit alongside Legend's scaled, high-intent acquisition funnel. This unites premium content with proven customer intent. Upon closing, we can activate cross-sell across our sportsbooks and gaming relationships, improving acquisition efficiency and increasing customer lifetime value. Importantly, this positions Genius Sports Limited to participate in the large and growing iCasino market, expanding our total addressable market by approximately 70%. In addition, players who engage in both iCasino and online sports betting are estimated to be roughly 15 times more valuable to operators than sports-only bettors. This places Genius Sports Limited at the center of our partners' highest value customer acquisition efforts. Next is monetization of a combined audience asset. Legend will materially expand our first-party audience reach. Combined with Genius Sports Limited's proprietary data graph, this creates a scaled, privacy-compliant audience asset that can be activated across the advertising ecosystem. This is expected to drive higher yield on traffic already within our control and allows Genius Sports Limited to bring a unique and powerful audience graph to other leading ad-driven platforms. In other words, Legend further strengthens our value to brands and agencies. We know who the fans are, we know when, and we know where they are engaged, and we are activating them at scale through Fanhub and in partnership with large global agencies like Publicis, WPP, and PMG. Third is scaling Legend's technology across leagues and teams to monetize their underutilized digital assets. Legend's technology platform has demonstrated its ability to drive engagement and conversion across owned and operated properties. If you recall the SimilarWeb data, many of our 400-plus league and team partners face the same structural need to better understand and monetize their fan audiences. Applying Legend's platform across our rights portfolio will extend the Genius Sports Limited model from data capture and distribution into audience activation and conversion. This shift is from selling audience access to selling influence over identifiable individuals whose behavior and propensity are measurable. And, finally, we will be able to distribute Genius Sports Limited's data and products through Legend's channels. We have spent years embedding Genius Sports Limited's data and products across the global sports ecosystem, from BetVision to broadcast augmentation and integrity services. Legend will provide a scaled, high-traffic distribution service. Integrating our data and product suite will further strengthen Legend's acquisition funnel while expanding the commercial distribution of Genius Sports Limited's assets. As we execute, we will quantify the impact of these four opportunities with discipline. We are confident that this combination will enhance both the growth rate and the cash flow profile of the business relative to our standalone trajectory. In the meantime, I will leave you with this final thought. The future economics of sport will be determined by the infrastructure through which fan participation flows. At its core, that infrastructure is shaped by three elements: official data, authenticated identity, and intent at the moment of transaction. Together, Genius Sports Limited and Legend operate across all three layers. This acquisition is a deliberate acceleration of the strategy that we outlined at our Investor Day and have been executing for years. By integrating data, identity, and intent at scale, we are positioning Genius Sports Limited to capture a greater share of the economic value flowing through global sports and gaming. We have proven our ability to execute, and with this added scale and capability, we will have a business that we believe is built to continue that track record of execution and compound value for years to come. And on that note, now open the line to Q&A. Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, please press star 1 again. Please pick up your handset when asking a question. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jordan Bender from Citizens. Jordan, we are just opening your line, and your line is now open. Jordan Bender: Thanks. I want to start on free cash flow. That was down in 2025. If we think through the standalone business, how much investment or one-time costs are in that number that might have held back free cash flow growth in the year? And just went through the Investor Day back in December. Can you remind us of the levers to organically increase free cash flow from here outside of the Legend acquisition? Bryan Castellani: Hey, Jordan. It is Bryan. On free cash flow, as we had announced that $281 million balance and our focus is growing that year to year. As we defined at Investor Day, we take EBITDA minus the cap software and CapEx and PP&E, as well as changes in working capital and taxes. And so for the year, that included some nonrecurring exceptional legal expense, or litigation related. If you exclude those, and I think you can see that was about a $30 million swing. The other thing we do adjust for is obviously M&A, like the Sports Innovation Lab acquisition, as well as the share raise. We do not want to take credit for that, nor on the M&A piece where those are longer-term strategic and so one year may have a bigger investment into that. But that is how we think about the free cash flow and those one-time nonrecurring impacted the year about $30 million. Jordan Bender: Understood. Thanks. And I want to switch over to the media business for a second. I assume you are not going to give us the actual numbers here, but maybe holistically, how much contribution did some of the new media agreements with, like, PMG and Publicis add to the total growth in media in the back half of the year? Bryan Castellani: Those scaled up, and they are early. We just announced those, and so they do take some time to ramp and work with them on onboarding clients and campaigns. So fairly muted, if any, impact on those. Jordan Bender: Understood. Thank you very much. Operator: Thank you very much for your question. Your next question comes from Jed Kelly from Oppenheimer & Co., Inc. Jed, your line is now open. Jed Kelly: Hey. Great. Thanks for taking my question. Can you give us an update on how partner conversations are going, particularly your media partners and media agencies, following the Legend acquisition? And then as my follow-up, you mentioned you expect some moderation of growth in the second half for the Media business. However, it seems there is going to be a decent amount of advertising around prediction markets given what the bigger players are saying. How much have you embedded that in your guide? Thanks. Josh: Sure, Jed. Let me take them in reverse order. On the prediction market piece, we are already seeing spend flowing through from advertisers activating in that space. That is through the historical Genius Sports Limited media business, and when Legend closes, we will have access to the activity they are running there as well. We expect to capitalize on the spend boom around prediction markets—we already have campaigns in market. Operators are talking about increasing spend on that activity, and we expect to be part of that. In terms of media partnerships and conversations, if you are keeping track of the big agencies, we have knocked a few down and there are a few more to go. All of those are progressing nicely. The Magnite announcement is a testament to the ecosystem buying into sports media and developing technologies on top of the Genius Sports Limited infrastructure. Our expectation is that we continue to see more of the ad tech and media community building on top of official data and our fan graph. Mark Locke: It might be worth taking a few minutes to explain that Magnite presentation in a bit more detail—how the economics work and why it is important. Josh: The way to think about our Genius Sports Limited sales channel for the media business is twofold. First, we go direct to agencies and brands with our own sales team, responding to large campaign briefs. Second, we are establishing a distributed sales channel through the ad tech ecosystem where we surface all of the Genius Sports Limited data and audience intelligence—what agencies are buying from us—inside platforms that already have scaled demand of billions of dollars. That allows our partners and their sales teams to take the Genius Sports Limited offering out to market. Operator: Thank you very much for your question. Your next question comes from Bernie McTernan from Needham. Bernie, your line is now open. Bernie McTernan: Great. Thanks for taking the question. At the Investor Day, there was a target of slightly more than half of the $500 million in total ad spend for media coming from self-service. How do you think this is going to break down between agencies and other ad tech players like Magnite? And are there any other buckets in there that are large that we should be aware of? And then I have a follow-up. Josh: It is hard to give an exact number right now because everyone in the industry works together. For example, we might be working with Coca-Cola—demand can come direct from the agency as part of a specific brief, but it can also come from other activity via the ecosystem. Our goal is to capture as much demand flow as possible across the ecosystem by covering both direct relationships with agencies and building into the ad tech ecosystem. We are indifferent where the spend comes from between those channels. Our goal is broad distribution. Over time, we will be able to get more accurate on exact splits across those sales channels. Bernie McTernan: Understood. Thanks, Josh. And as a follow-up, I believe the expectation is that betting tech revenue should grow faster in the first half of the year versus second half. Can you provide commentary on how we should expect rights costs to grow on a full-year basis and the sequencing between the first half and the second half? Bryan Castellani: On rights growth, you saw some of the year-to-year impact. Remember we onboarded or acquired Serie A and EPFL in late summer, so that influenced Q4 and will influence the first half. It is also the first year of our new term on the EPL, which impacts the first half as well as Q4. But that is all phasing and inside of the strong guide we have for 2026. Bernie McTernan: Okay. Understood. Thank you. Operator: Thank you very much for your question. Your next question is coming from the line of Ryan Sigdahl from Craig-Hallum Capital Group. Ryan, your line is now open. Ryan Sigdahl: Good day, guys. On March Madness—you have been partnered with TMCA for many years and had exclusive distribution last year—how are you thinking about March Madness this year from a betting standpoint and separately from a Fanhub ad tech standpoint? And is BetVision potentially an opportunity there? And then I have a quick follow-up. Josh: We see March Madness as a big opportunity. We expect consistency with what we have seen across the betting business in previous years on betting activity, in line with market growth. On the advertising side, the first major event where our moment engine is widely available is March Madness. It is early days, but we expect to pick up a few test campaigns this year, with us going harder next year. It is incremental revenue monetized across multiple distribution channels for us with no additional rights fees. Mark Locke: And from that point of view, it is a powerful endorsement of the strategy we have been outlining over the last few years. Ryan Sigdahl: For my follow-up, a quick one for Bryan—how should we think about litigation costs as we head into 2026, given that was a pretty big one-time in 2025? Bryan Castellani: We will update on any litigation-related activities as appropriate. Those are live, and I will not comment further here. As we say, we are focused on growing that cash balance year to year. Josh: And to the extent those drive swings, we will communicate that as such when we know it. Ryan Sigdahl: Fair enough. Thanks, guys. Good luck. Operator: Thank you very much for your question. Your next question comes from Clark Lampen from BTIG. Clark, your line is now open. Clark Lampen: Thanks for taking the question. Maybe we could take a step back around the media business and agency relationships. For a lot of us that are newer to this rapidly growing component of your business, could you give us a 101 on how these relationships work and evolve over time, and how they are augmented by things like augmented advertising? You are clearly going after the agency holdco ecosystem and already have relationships with two of the big five. How should we think about the practical workflow and impact on your business? Josh: Happy to. We are building our advertising business through two channels: direct to agencies and brands, and integrations across the ad tech ecosystem. Our ethos is the same across both: Genius Sports Limited is the infrastructure layer for sports media. Commercially, we take media packages to market as curated deals. A curated deal bundles our audience data—our fan graph and understanding of fans—with inventory. That inventory can be Genius Sports Limited-owned, like BetVision and augmented ads, or premium third-party inventory. On top of that sits our moments engine, which we historically used in-house but are now externalizing so anyone can transact on it. Workflow-wise, we bundle audiences, inventory, and our intelligence layer based on an advertiser brief, and provide a unique code or deal ID that agencies input into their buying platforms. Over time, you build a portfolio of curated deals, creating ongoing money flow from campaigns across the ecosystem, buying Genius Sports Limited audiences and inventory. Growth comes from two levers: more active deals tapping more demand flow, and expanding the share of unique inventory we control within those deals, which drives revenue and margin expansion. Mark Locke: It may also help to explain how media buyers actually operate and how that evolves. Josh: Buyers at agencies work across multiple platforms and advertisers. As they expand campaigns, they often duplicate campaigns, carrying our deal IDs across. That helps keep deals active. The Legend acquisition enhances this further: we gain new intent signals and audience data that can be fed into curated deals to improve performance and address a wider variety of briefs. And as we create more unique inventory with the Legend tech stack, we can feed that into deals with an instant monetization path. Clark Lampen: Really helpful. And as a quick follow-up on Legend, there are a couple of levers for revenue synergies: applying Legend tech to Genius properties, expanding properties, and backlog monetization. As we think about the second half of the year, which of those is most addressable or accretive in 2026? Josh: The most immediate impact will be cross-sell to the existing customer base. From a technology perspective, access to Legend’s audience data is next—expect that to flow into our moment engine as soon as the deal closes, like we highlighted in the Magnite announcement. The slightly longer-tail synergy is building hosted solutions with our league partners—those integrations take longer than plugging audience data into our platform. Mark Locke: One immediate application of the Legend engine is in BetVision. We get paid roughly three times more for in-play betting. BetVision is now knocking on the door of 25,000 events and growing. The Legend engine will optimize BetVision in real time to maximize commercial returns, increasing the proportion of in-play betting. We are a bit over 30% in-play in the U.S. today; Europe is 70%–80% in some cases. We expect to accelerate toward those levels, which compounds our revenue shares. Operator: Thank you for your question. Your next question comes from the line of Eric Handler from Roth Capital. Eric, your line is open. Eric Handler: Thank you very much. Good morning. Two questions. First, with regards to advertising inventory, you have a good amount of first-party inventory and some third-party inventory with Yahoo Sports and SI. Do you have enough inventory at this point to achieve your financial targets, or will you need more? And are you talking to any new leagues or teams about inventory? Second, on BetVision, you mentioned around 25,000 events. Over the next 12 to 18 months, how high can that number go, and which sports are next? Josh: On inventory, we always want more unique inventory because it provides a competitive moat. Do we need more to deliver our numbers? Not necessarily. The beauty of the moment engine is we can apply our models across our own inventory and third parties. Premium publishers are reaching out to run our moments engine across their inventory, which brings us into additional demand flow. So we have multiple commercialization paths without requiring more owned inventory. Mark Locke: And Legend gives us a massive amount of unique inventory that we own and control, further strengthening our position. Bryan Castellani: On BetVision, in the materials we mention a path to around 300,000 events. A big driver of that is esports competitions. We recently added tennis and continue to build out across FIBA and others. We are always looking for more ways to expand our owned and operated inventory. Esports was a relatively easy bolt-on and delivered a significant number of events. Eric Handler: Thank you. Operator: Thank you very much for your question. Your next question comes from the line of Trey Bowers from Wells Fargo. Trey, your line is now open. Trey Bowers: Hey, guys. Thanks for the question. Another BetVision question—any chance you could dig into what you learned from this most recent NFL season? Around engagement, interaction—how did that progress as the season went on? Any metrics you could provide would be helpful. Bryan Castellani: We continue to see year-over-year engagement improvement on NFL as we ramp implementations and users get more familiar with it. Session times and repeat visits are increasing as we add more events. We also saw a 32% increase in unique plays on NFL and 62% across soccer. Trey Bowers: Great. And a follow-up for Bryan: any early sense of potential one-timers for 2026 free cash flow so we are not surprised as the year progresses? M&A costs, etc.? Bryan Castellani: Not at this time. We are focused on continuing to grow the year-to-year cash balance. We have given the annualized impact of the pro forma business—reaching about 30% EBITDA margin with near 50% free cash flow conversion. It is too early to specify any one-timers for 2026 today. Trey Bowers: Thank you. Operator: Thank you very much for your question. Your next question comes from the line of Barry Jonas from Truist. Barry, your line is now open. Barry Jonas: Hey, guys. On Legend, can you talk more about the reaction of your league partners to the deal and specifically address Legend’s work in prediction markets and sweepstakes and the comfort level there? Mark Locke: There are two distinct parts. First, league partners are very positive about our ability to drive wider viewership and get messaging out to a much larger audience we control—that was a big attraction for us. If you are a league and want to access sports fans in North America, the chances are we have them, and we can talk to them for you. On prediction markets, that is separate from league partners—I would not conflate the two. We see the advertising opportunity in prediction markets as significant, and Legend’s role in capturing that marketing spend is clear. More broadly, ask whether prediction markets are increasing the number of people making wagers on sports in the U.S. If the answer is yes, that is good for our market and our business, increases TAM, and increases the requirement for data—both marketing and market-making. We are watching a rapidly evolving regulatory transition with what we think is an obvious medium-term outcome. We have seen this journey before. The value of our data to sportsbooks today is a multiple of what it was a decade ago. We see an interesting opportunity to distribute data to prediction markets as regulation evolves. Our data will be needed. Operator: Thank you very much for your question. Your next question comes from the line of Chad Beynon from Macquarie. Chad, your line is now open. Chad Beynon: Hi. Good morning. Great to see you continue to outpace the betting market. From partners, we have heard about high hold and lower volumes across NFL this season. What are you seeing from an engagement standpoint? Is there any concern that volumes have decelerated, and could that impact your 2026 betting guidance? And then a quick follow-up. Mark Locke: Short answer: no. If you look at our numbers, we are not seeing an impact and do not expect to. Remember, we are a global business—not just U.S. The South American market is growing quickly, Europe is still growing nicely, and there are many global opportunities. We see ourselves as the picks and shovels and somewhat immune to handle volatility. On your broader point, our global betting growth was 33% in 2025; U.S. betting growth was 50% versus roughly 30% for the U.S. market. That reflects additional products like BetVision and in-play, more content like Serie A and EFL, and pricing. These support a sustainable, stable, predictable business. Chad Beynon: Thanks, Mark. And as a housekeeping item, what are the final steps to close the Legend deal? You mentioned Q2—what remains? Mark Locke: Simply regulatory approval. Chad Beynon: Thank you very much. Operator: Thank you very much for your question. Your next question comes from the line of Jason Bazinet from Citi. Jason, your line is now open. Jason Bazinet: Thanks. Two quick ones. You mentioned migrating from gross to net revenue recognition. Can you confirm that was contemplated in the guide? And when does that go into effect, and what is the magnitude? Bryan Castellani: Jason, it is in the guide. We spoke about it at Investor Day. Some curated deals include placing our IDs and moments engine on third-party sell-side platforms. There we take a lower share of the overall campaign but at higher margins. That dynamic was implied at Investor Day and is reflected in the 2026 and 2028 guidance. Jason Bazinet: Thank you. Operator: Thank you very much for your question. Your final question comes from Gregory Gibas from Northland Securities. Greg, your line is now open. Gregory Gibas: Great. Thanks for taking the questions. First, could you provide color on Legend’s revenue breakdown—how much is derived from media/advertising placements versus revenue share and lifetime revenue share? And second, how did self-serve versus managed trend in Q4 versus prior periods? Mark Locke: Roughly 50/50 between media/advertising and revenue share, including lifetime revenue share. Josh: On self-serve versus managed, self-serve is still a smaller share today. Much of the incremental gross revenue we are adding is coming from building out the self-serve, curated-deal portfolio, which takes time. In Q4, we still had a decent amount of managed service as we picked up scatter budgets at year-end. Over the longer term, we expect steady growth by distributing curated deals and gradually shifting the mix toward self-serve. Operator: Thank you for your questions. There are no further questions at this time. This concludes today's call. Thank you for attending, and you may now disconnect.
Operator: Ladies and gentlemen, thank you for standing by, and welcome. At this time, all participants are in listen-only mode. Following the presentation, there will be a question-and-answer session. Please be advised that today's conference call may be recorded. I would now like to hand the conference call over to Anne Marie Fields, Managing Director at PrecisionIQ. Please go ahead. Anne Marie Fields: Thank you, operator. Good morning, and welcome to Cellectar Biosciences, Inc.’s fourth quarter and full-year 2025 Financial Results and Business Update Conference Call. Joining us today from Cellectar Biosciences, Inc. are Jim Caruso, President and CEO, who will provide an overview of the company's progress before turning the call over to Chad Kolean, CFO, for a financial review of the quarter and the year. Following this, Jarrod Longcor, Chief Operating Officer, will give an update on the company's progress and plans for its promising clinical development pipeline of radiopharmaceuticals. Cellectar Biosciences, Inc. issued a release earlier this morning detailing the contents of today's call. A copy can be found on the investor page of Cellectar Biosciences, Inc.’s corporate website. I want to remind callers that the information discussed on the call today is covered under the Safe Harbor provision of the Private Securities Litigation Reform Act. I caution listeners that management will be making forward-looking statements. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the business. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's press release and in our SEC filings. The content of this conference call contains information that is accurate only as of the date of this live broadcast, 03/04/2026. The company undertakes no obligation to revise or update any forward-looking statement to reflect events or circumstances after the date of this conference call and webcast. As a reminder, this conference call and webcast are being recorded. We will begin the call with prepared remarks and then open the line for your questions. Let me now turn the call over to Jim Caruso. Jim Caruso: Thank you, Anne Marie, and thank you all for joining us this morning as we review Cellectar Biosciences, Inc.’s progress throughout the year. 2025 was a productive and strategically meaningful year for Cellectar Biosciences, Inc. Across the organization, we executed with focus and discipline, advancing our lead asset, Iapocin, I-131, strengthening our regulatory position in both Europe and the U.S., and progressing our next-generation radiotherapeutic programs supported by our proprietary phospholipid drug conjugate platform. Let me begin with iapocene I-131, our late-stage in Waldenstrom's macroglobulinemia, or WM. As discussed in this morning's press release, we ended the year with regulatory alignment in Europe. Following guidance from the EMA's Scientific Advice Working Party, or SAWP, we remain on track to submit a conditional marketing authorization application in 2026, positioning iapopacine for potential approval in European commercialization as early as 2027. This EU regulatory clarity together with iaupopasim's PRIME designation underscores both the strength of the CLOVER-WaM dataset and the significant unmet medical need. As the full twelve-month follow-up data become available in early 2026, we are even more convicted on our plans to pursue an NDA under the accelerated approval pathway. These assumptions are supported by hypopacine's FDA Breakthrough Therapy designation for WM, and by our agency dialogue. In addition, we continue engagement and partnering conversations to support the program globally. Beyond iapofacine, we also made important progress across our broader PDC-based radiotherapeutic pipeline. We initiated the Phase 1b study of CLR125 in triple-negative breast cancer, or TNBC. CLR125 is an iodine-125 Auger-emitting agent designed for highly precise tumor targeting, and its initiation represents a key milestone for this second asset. The dose-finding study is ongoing, and we expect early interim data in mid-2026. We also strengthened the infrastructure supporting our alpha-emitting program, CLR225, through new supply partnerships with ITM Technologies and Ionectics, providing commercial-scale access to 225 and astatine-211 for future clinical development. Importantly, 2025 also marked significant expansion of our global intellectual property estate with new patents issued across Europe, Asia Pacific, the Middle East, as well as the Americas. These patents bolster the protection of ibuprofen I-131, CLR125, and the broader PDC platform. Finally, we raised approximately $15.2 million over the course of the year, extending our cash runway and enabling ongoing advancement of our pipeline, which positions us to achieve a number of value-creating milestones throughout the year. With that brief overview, I will now turn the call over to Chad to review our financial results. Chad? Chad Kolean: Thank you, Jim, and good morning, everyone. I will address our financial results for the year ended 12/31/2025. We ended the year with cash and cash equivalents of $13.2 million, as compared to $23.3 million as of 12/31/2024. In the fourth quarter, we raised $5.8 million and now expect that our cash on hand is adequate to fund budgeted operations into 2026. Turning to our results from operations, research and development expenses for the three months ended 12/31/2025 were approximately $11.5 million, compared to approximately $26.6 million for the year ended 12/31/2024. The overall decrease in research and development was largely driven by the conclusion of patient enrollment and declining patient follow-up for our CLOVER-WaM clinical study, modestly offset by increased activity in our preclinical development project costs. General and administrative expenses for the year ended 12/31/2025 were $11.5 million, compared to $25.6 million for the same period in 2024. The decrease in SG&A was primarily driven by deemphasizing pre-commercialization efforts and related personnel cost reductions. Other income was approximately $1.1 million for fiscal 2025, while in 2024, other income was $7.3 million. These amounts are non-cash and largely a result of the impact of issuing and marking to market certain warrants. The warrants we issued in 2025 were classified as permanent equity upon issuance, reducing the impact on the statement of operations in comparison to fiscal 2024. Net loss for the full year ended 12/31/2025 was $21.8 million, or $8.35 per basic and diluted share, compared with $44.6 million, or $36.52 per basic share and $41.89 per diluted share during 2024. Now I will turn the call over to Jarrod for an operational update, including plans for our pipeline of radiopharmaceuticals. Jarrod Longcor: Thank you, Chad, and good morning, everyone. As Jim highlighted, our regulatory and clinical progress in 2025 positions us well for important advances across our pipeline programs and for a milestone-rich 2026. Starting with iapobicine I-131, our EMA and FDA have provided us with clear, actionable regulatory paths. In Europe, we are planning to submit this conditional marketing authorization application later this year. In the U.S., we continue to make strong progress in our regulatory engagement as we work with the FDA on the accelerated approval pathway and the design of our confirmatory Phase 3 trial to support full registration. As requested by the FDA in November 2024, we have now collected twelve months of follow-up on all patients and, based upon further review of the data, agree that a confirmatory study evaluating iapocene I-131 in a post-BTKi treated patient population in the second-line setting is appropriate. Importantly, this earlier line more than doubles the potential addressable population in the U.S. As mentioned, we have been analyzing the more mature CLOVER-WaM dataset, including the full twelve-month follow-up for all patients, and are very encouraged that the results continue to demonstrate robust and durable clinical benefit over time in this salvage treatment setting where there are no approved drugs. In addition, new subgroup analyses, particularly within defined high-need patient segments, are emerging as especially promising. We look forward to sharing these findings with regulators as part of our ongoing discussions. Taken together, we believe the strength and consistency of these data provide a robust foundation for our U.S. and EU registration strategy. Over the remainder of the year, we intend to present our findings, including a minimum of twelve-month follow-up on all patients, updates on response data, duration of response, progression-free survival, and detailed outcomes in various patient subsets at major medical meetings. We expect these results to be highly compelling to both the clinical community and regulatory decision makers. Beyond WM, ibuprofen continues to show potential across multiple oncology indications. Prior data sets in multiple myeloma and diffuse large B-cell lymphoma demonstrated strong activity in these hematologic malignancies, and recently, I presented data at the AACR Special Conference on Pediatric Cancer from a study of iapopacine in relapsed/refractory pediatric high-grade glioma that showed IFOP seemed to provide meaningful improvements in progression-free survival and overall survival and to be well tolerated with a consistent safety profile. Iapofacine remains an asset with tremendous global market opportunity, and its success supports other assets in our radiopharmaceutical pipeline, including CLR125 and CLR225, and further validates our proprietary phospholipid delivery mechanism. Turning now to CLR125, our Auger-emitting asset for solid tumors, which has the potential to provide extreme precision targeted radiotherapy due to the short-distance Auger emission travel, meaning the isotope must be delivered within the cell and near to the nucleus. As Jim noted earlier, we initiated a Phase 1b dose-finding study in TNBC at two sites, and we will be adding additional sites in the second quarter. This study is evaluating three dosing regimens with an expansion arm planned once the recommended Phase 2 dose is determined. We anticipate a steady cadence of results throughout 2026, including early, interim dosimetry, safety, and preliminary efficacy data. For CLR225, our alpha-emitting asset, we completed IND-enabling work and are ready to initiate a Phase 1 trial pending available funding and continued strategic alignment with corporate objectives. Preclinical studies in pancreatic cancer models have shown compelling tumor inhibition at multiple dose levels, further demonstrating the potential of targeted alpha therapy within our platform. Across the pipeline, our expanded global patent estate provides long-term protection for ibuprofen, CLR125, and dosing regimens central to our PDC technology. Combined with strengthened isotope supply partnerships, we believe we are well positioned to build sustainable value. 2025 was a year of significant regulatory, clinical, and operational advancement, and we look forward to continuing this momentum throughout 2026. Jim, I will turn it back to you for closing remarks. Jim Caruso: All right. Thanks, Jarrod, for that overview. As you have heard today, 2025 was a year defined by meaningful progress across the entirety of our radiotherapeutic pipeline, with strong execution across the organization. We advanced iapoficine toward key regulatory submissions that would accelerate its market approval and get this much-needed therapy to patients. We initiated the CLR125 Phase 1b trial for triple-negative breast cancer, expanded our intellectual property, strengthened supply chain infrastructure, and extended our cash runway. We are entering 2026 with clear vision, strong momentum, and a pipeline supported by robust science and regulatory engagement. We expect multiple value-creating milestones in the months and year ahead, and remain focused on delivering transformative therapies to patients with difficult-to-treat cancers. I want to extend my gratitude to our outstanding Cellectar Biosciences, Inc. team whose commitment and hard work continue to drive our programs and the company forward. We remain deeply committed to the WM community and are grateful for their strong support and encouragement as we work to bring hypophasine to patients. We will now open for questions. Operator, we are ready to open the call for questions. Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the queuing process, please press the star followed by the number two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Aydin Huseynov with Ladenburg. Please go ahead. Aydin Huseynov: Hi. Good morning, Cellectar Biosciences, Inc. team, and congratulations for the progress in 2025 and so far in 2026. A couple of questions I have regarding apofacine. So you are planning to submit in the third quarter for EMA. I am just curious to understand, can you use the same package that you will submit to EMA? Can you use exactly the same package for the FDA submission as well? And how long after you start the Phase 3 trial can you actually initiate that process of submission with the FDA? Jim Caruso: Sure. Aydin, first of all, thank you for participating in the call. As always, we appreciate that and your coverage of the company. Let me start, and then we will turn it over to Jarrod to provide some additional details relative to your question. As you may recall, we have already built out substantial portions of our NDA application, and although the format with the EMA is different, there are a lot of similarities in terms of the requested data. So a lot of the work that we have already done in preparation for our NDA submission, we can also apply to the EMA. Jarrod has been providing oversight on this process and I will turn it over to him to provide greater detail. Jarrod Longcor: Good morning. Great question. So the very short answer is yes. The data itself is essentially the same, and so it is all, obviously, it is all the CLOVER-WaM data. There will be some different, what I will call subset analyses, that the EMA may have requested that might be a bit different than what the FDA might request. So we are executing on that. And as Jim said, the standard packages are a little different, the ordering and how things come together for the EMA versus the FDA. The actual NDA is a little different from the CMA package development, but otherwise, it is all the same. So, as you said, that is pretty much largely taken care of at this point. And then your second part of your question was, I think, how long to submitting in the U.S. post the initiation of the confirmatory study? Is that correct? Aydin Huseynov: Yes. Yes. Jarrod Longcor: Okay. So the way we are doing that, just to share, back when we met with the agency in November 2024, where they basically outlined for us a handful of criteria that were necessary for us to achieve in order to be able to submit for the accelerated approval, part of what they shared was that, for an accelerated approval, a study must be initiated at the time of submission and ongoing, meaning enrolling patients, at the time of regulatory action. So what we have taken, or the way we are approaching this, is about a month or two post the initiation of the study, having a handful of sites open, we would then submit the NDA to the FDA. That should allow us to have enrolled one or two patients essentially at that point, and then, over the intervening six months, because we now have Breakthrough—remembering that we got Breakthrough designation in May 2025—we are now eligible and have the guaranteed six-month review under the accelerated approval pathway, and so we would then expect that that feedback would come in six months, and we would want to make sure that we had about 10% of the patients enrolled. Jim Caruso: So, Jarrod, to summarize that, within seven to nine months of initiation of the study, assuming we submitted the NDA a month or two post initiation, we would have a response from the FDA regarding the accelerated approval. And I think, Aydin, it is also important to point out that at that point in time they are not reviewing any data out of the confirmatory study. It is just a function of the study being initiated, is ongoing, and patients are successfully being enrolled. Aydin Huseynov: Understood and very helpful. And for the Phase 3 confirmatory study design, I mean, it seems like the design is okay with both U.S. and EU to get the full approval. But just for modeling purposes, you are getting into an earlier line of therapy, second line for BTK, and comparing this to rituximab and standard of care. I am trying to understand what it is that we should model in terms of the differences in PFS on evapofolcin versus the standard of care, and, you know, just to get a better sense in terms of what to expect down the road. Jarrod Longcor: Absolutely. And another great question. So, until recently, it was very difficult to give a definitive answer here because nobody had really evaluated any salvage therapy in a post-BTKi exposed patient population. However, earlier this year, or late last year, I guess early 2025—I have to remember we are in 2026 now—a group out of Italy, where the lead author's name was Fristauchi, produced data looking at seventy-eight post-BTKi patients, irrespective of what salvage therapy they got. So these patients received rituximab, chemo, combinations like RCD, or rituximab-bendamustine. They also received subsets of them also received pirtobrutinib, so a noncovalent BTKi. They also received proteasome inhibitors. They received venetoclax or BCL-2 inhibitors. So they basically got every alternative salvage therapy. In all cases, these patients, as a median, their PFS was eight months if they were a second-line patient, irrespective. And what you see is when it was RCD or any of the rituximab combinations, it was sub-eight months as progression-free survival. And so you can clearly model that number because it was a significant patient population, approximately seventy-eight patients again. Jim Caruso: I think, thank you, Jarrod. Very helpful. And I think I can provide some additional color relative to our data. Obviously, I cannot report because we have not publicly disclosed the updated twelve-month data, but it will include what we believe to be some very robust durability elements associated with the twelve-month data. So we are really excited about the data package. If everyone was impressed with our clinical data, Aydin, that we have put in play to date, I think the subsequent data based on the twelve-month follow-up is going to be viewed as very, very exciting. And the other element here, and you brought this up, is significant. As you recall, in the CLOVER-WaM study, on average, we were the fifth line of therapy, which means four lines of therapy prior to the utilization of ibuprofen on average. However, under Jarrod's leadership, the team has done substantial analysis, and we have really been able to segment, based on the latest data cut that occurred in December 2025, these patients and the variety of subsets, but also importantly, where they sat in terms of the number of prior treatments. And we will tell you that, as you would expect, as you advance further upstream, the data is more and more impressive. And, as you cited, second line in the U.S. the patient population is double that of third line plus. So it really not only does it create opportunities for clinicians to provide their patients with a meaningful treatment option, there are also going to be a lot more of them in the U.S. and globally benefiting from this treatment. Jarrod Longcor: And just historically, so that we do not lose that, currently, right now in the United States, and it is increasing in Europe, the BTKis are being predominantly prescribed in the first-line setting. Whether that is in combination with rituximab or as monotherapy, since the ibrutinib-rituximab study came out showing that potential in the first-line setting, most of the U.S. physicians have transitioned into a BTKi in the first-line setting in some form or fashion, which means the second-line setting is a BTKi patient population today. Aydin Huseynov: Thank you. Very helpful. And looking at your prior major response rate, they were already high, in our eighties, and you are going to move to the earlier line of therapy. And, typically, the responses increase in earlier lines of therapy. So just curious to understand your sort of benchmark in the earlier line of therapy, and whether this Phase 3 trial design will have some sort of top-line major response rates first before we see the PFS, maybe at some point one year after we start the trial. Jarrod Longcor: So the primary endpoint for the confirmatory study is progression-free survival. Obviously, a secondary endpoint is going to be major response rates or response rates as a whole, and, obviously, major response rate is one of them. What I would say is we will not be announcing data from a confirmatory study during enrollment because, obviously, that can result in bias being introduced into the study, and especially in a comparative study. And that would be problematic and would actually negatively impact the review eventually for full approval. Jim Caruso: And so, Aydin, I will add to that. You know, and it is going in a potentially different direction. Based on the primary endpoint, progression-free survival, in that confirmatory study, you can take a look at the Fristauchi data, and you will get a sense as to the progression-free survival there. And so this study is powered in such a way, as we introduce our PFS and durability performance for this drug out of the CLOVER-WaM study, I think it will very quickly determine that, the way the study is powered for the confirmatory study, we are setting ourselves up for a high probability of success, assuming the PFS remains consistent with all of the literature and data that we have seen. And best case there for PFS, as Jarrod discussed, was 8.1 months. So we feel very, very comfortable with PFS being the primary endpoint based on the literature. Aydin Huseynov: Thank you. Very helpful. And the last question I have regarding the current environment in post-BTK in U.S. and EU, what do you feel in terms of the enrollment speed and level of interest of PIs and among patients to be participating in this trial once you start it. Jarrod Longcor: I can say directly that, having spoken with every one of the PIs that were in the CLOVER-WaM study, the interest from the physician side is extremely high. I can say in a number of cases, when I have talked with them recently, they have all felt that the delay from a regulatory standpoint in getting to this point is largely unwarranted and that this drug absolutely has a spot in the marketplace and a significant need to fill. And so I think that that is important from that perspective. I think, again, as patients, this is a very active patient population. They are very engaged as a community and in looking at new therapies. I think as patients and these physicians get a look at the new data that is coming out later this year, as we were talking about, so over the remainder of this year, I think everybody is going to be very excited about the ability to participate and have the impact that ibuprofen can have for them and their disease in this setting. Jim Caruso: And I would add that, in addition to the thought leadership that are very excited about this because they are on the cutting edge, they understand and observe the performance of existing salvage therapies, especially just post first line. And as I think Jarrod cited earlier, BTKis are used predominantly now either as a monotherapy or in combination with rituximab in first line. So you are already, for many of these patients, in a salvage therapy mode in the second line. But interesting here, Aydin, in addition to key thought leadership around the globe really appreciative of the feature benefits that this product provides their patients as early as second line, this also tested extremely well with community-based physicians. So we really see this transitioning out of a controlled clinical environment at these world-class institutions or WM catchment centers. Because of the ease of administration and, quite frankly, the lack of artistry required here relative to other drugs—the four simple doses—our community-based physicians are as excited as the thought leaders as well. So I think all constituents, including nuclear medicine and radiation oncology that have a seat at the table in terms of the utilization of this drug, all constituents are really excited about the opportunity to bring this patient to the many patients that will benefit from treatment. Aydin Huseynov: Thank you. Super helpful, and congratulations with the progress so far, and we will be looking forward to seeing your twelve-month data later this year. Thanks so much. Jim Caruso: Thank you, Aydin. Operator: Thank you. The next question comes from Edward Andrew Tenthoff with Piper Sandler. Please go ahead. Edward Andrew Tenthoff: Great. Thank you, guys, for taking my question, and congrats—my congratulations too on the very hard work and steady progress. You guys deserve a persistence award for sure. I wanted to follow up, two questions if I may. So firstly, and I apologize if I missed this, but what would be the plans to distribute in Europe, and can you walk us through a sense of what that second line now in Europe—would it be second line too, or there it is actually a little different where you would be getting approved? And what does that patient population look like? Thank you very much. Jim Caruso: Thank you, Ted. Great to have you on the call. Appreciate your interest, your continued interest in the company. You have been very supportive, so we are appreciative of that. I will have Jarrod launch into this, and then I can fill in any blanks or provide additional color. Jarrod Longcor: Great, and thank you, Ted. From a distribution plan, the idea here is that, obviously, Cellectar Biosciences, Inc. itself, we will not really commercialize it ourselves in Europe. We are in discussions with various parties that we would partner with to actually do the commercialization in Europe on our behalf, in one way or another. So we are looking at partnership as the main thing. Just to give you a sense, we have set up our distribution of a radiotherapeutic in a global sense. I will remind you that the CLOVER-WaM study was run as a global study where we had approximately 25 sites in Europe. We had a handful of sites also in Asia and Australia. And so we have set up a logistical chain that allows us to ship and cover the globe easily with this product. And I will remind you, for folks that may have forgotten, that we have a unique competitive advantage in the marketplace that is often overlooked, which is our shelf lifetime. Most radiotherapies have a shelf life of about three to seven days max. Ours is 21 days. That allows us—and it is not cold chain; it is at room temperature. It allows us to more easily distribute this product globally and make sure that it is conveniently handled by the physicians and by the patients. So that sets up the distribution. Now, the second part of your question was really about, in Europe, where would the approval be, and what is the size of the market? So in general, just to give you a sense, the size of the European market is generally about 10,000 or so patients in total greater than the U.S. I would say that when we look at the second-line setting, the U.S. market is just a bit south of 12,000 patients. In Europe, its second-line setting is generally a bit over 12,000, approaching 13,000 patients, is what we have come to learn. And so it is a meaningful patient subset. Now, the conditional marketing authorization would actually be a later line utilization, so it would be a third line or later post-BTKi patient population. That is largely because still in Europe, they are transitioning. They are using BTKis more in a first-line setting, but they are more evenly split right now between first-line and second-line utilization of BTKi. So the median would likely be a third-line or later sort of position. Upon the confirmatory study, I think we would be shifting to a second-line setting in Europe. Edward Andrew Tenthoff: Great. That is very, very helpful color. Appreciate it. Thank you. Jim Caruso: Alright. Thanks so much, Ted. Operator: At this time, Jim will address questions sent electronically. Please go ahead. Jim Caruso: Alright. So if there are no other questions, I have some that are in the inbox. Jarrod, you up for another question, or—alright. I think I will decipher this one. What is the benefit of the twelve-month data cited in the press release versus your December 2024 data? Jarrod Longcor: Good question. So what I would say is that, reminding folks that in the December 2024 data, most of the patients that we had enrolled at that point did not have twelve months of follow-up data on them. They were still essentially shortly post their treatment segment and therefore did not have the twelve months. Since that time, we have all patients with at least twelve months of follow-up, and while the data presented at ASH was very good in 2024, I think, as Jim alluded to earlier, this follow-up data is even better. And what I mean by that is there are improvements in the response rates, there are improvements in durability, there are improvements in progression-free survival. So across the board, we are seeing depth and durability of the responses going out and looking stronger than they did in December 2024. Jim Caruso: Jarrod, could you elaborate on the benefit relative to the regulatory pathway with the FDA in the U.S. on the twelve-month data. Jarrod Longcor: So, in November 2024, the FDA laid out essentially a pathway for accelerated approval that really had two key components to it. One was that we needed to have twelve months of follow-up on all patients, which obviously we now have, which allows us to then take that next step. And the next step was really that we needed to have an ongoing confirmatory study in an earlier line of patients, so as to not be between our study and commercially available product. At the time, we were a little worried about moving to a second-line setting because we did not really have data that would say whether we would be better or worse in that line of setting or the same. Now, with the analysis and the twelve-month follow-up data, we now know exactly that we performed better in an earlier line of setting, as one might expect, but with the confidence now we have the data sets that show and validate that approach. And I think sets us up very nicely for both the confirmatory study, but then also the accelerated approval and moving forward. Jim Caruso: Alright. We have one more here. It is a layup, which means I will handle it. Will this data include durability, such as PFS and DOR? So PFS, progression-free survival, and DOR, duration of response, the answer is yes. Beyond the response data such as major response, complete responses, very good partial responses, the overall response rate metric, and clinical benefit rate, we will be providing progression-free survival and duration of response, not only in the broader population, but in important subsets like post-BTKi and refractory BTKi patient populations where this drug is, or appears to be, naturally falling post-BTKi based on the regulatory path both in the EU and here in the U.S. So with that, I will turn it back over to the operator. Operator: Thank you. We have reached the end of the question-and-answer session. Let me turn the call over to Jim Caruso, President and CEO, for closing remarks. Please go ahead. Jim Caruso: All right. Thank you, operator. Thank you, everyone who participated in today's call. We appreciate your time. Have a good day. Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Operator: Good morning, and welcome to Ocugen, Inc.'s Fourth Quarter and Full Year 2025 Financial Results and Business Update. All participant lines are currently in listen-only mode. Following the speakers' commentary, there will be a question-and-answer session. I will now turn the call over to Tiffany Hamilton, Ocugen, Inc.'s Head of Corporate Communications. You may begin. Tiffany Hamilton: Thank you, Operator, and good morning, everyone. Joining me on today's call and webcast is Dr. Shankar Musunuri, Ocugen, Inc.'s Chairman, CEO, and Co-Founder, who will provide a business update and an overview of our clinical and operational progress. Rita Johnson Green, our Chief Financial Officer, is also on the call to provide a financial update for the quarter and full year ended 12/31/2025. Dr. Huma Qamar, Chief Medical Officer, will be available to answer questions following the presentation. This morning, we issued a press release detailing associated business and operational highlights for the fourth quarter and full year 2025. We encourage listeners to review the press release, which is available on our website at ocugen.com. A replay of this call, along with the accompanying slide presentation, will be available on the Investors section of the Ocugen, Inc. website at investors.ocugen.com. Before we begin, please note that certain statements made during today's discussion may be forward-looking in nature, including those related to our clinical development pipeline, regulatory timelines, commercialization strategy, and financial information and our anticipated cash runway. These statements reflect management's current expectations and are inherently subject to risks, uncertainties, and assumptions that may cause actual outcomes to differ materially from those expressed or implied. We encourage you to review our filings with the Securities and Exchange Commission, including the risk factors detailed therein, for a more comprehensive understanding of these potential risks. Finally, Ocugen, Inc.'s Annual Report on Form 10-K covering the full year 2025 will be filed today. I will now turn the call over to Dr. Musunuri. Shankar Musunuri: Thank you, Tiffany. And thank you all for joining us today. I am pleased to share an update on what was a transformative year for Ocugen, Inc. Considerable development across all of our modifier gene therapy programs, including licensing and financing agreements to strengthen our financial position and meaningful appointments to our leadership team, made 2025 a year of real momentum for Ocugen, Inc. We are now poised to leverage upcoming catalysts and advance the business as we near the first half of our three BLA filings. I am proud of what this team has accomplished, and I am confident that with the full range of experience in retinitis pigmentosa, which I will refer to as RP going forward. It is important to note that the Phase 3 Limelight clinical trial is the only broad RP gene-agnostic trial, and the largest known Phase 3 orphan gene therapy trial. Approximately 300,000 people in the U.S. and Europe are living with RP, which is caused by mutations in more than 100 genes. OCU400 is designed as a modifier gene therapy utilizing NR2E3, a central transcriptional regulator of retina-specific pathways, to address multiple genetic mutations with a single one-time treatment. The only approved gene therapy approach for RP today targets a single gene, RPE65, which accounts for just 1% to 2% of the total RP patient population. We believe OCU400 has significantly wider commercial potential, as it is intended to provide a therapeutic option for 98% to 99% of all RP patients. I am pleased to report that enrollment is now complete for the OCU400 Phase 3 Limelight trial. As a one-year clinical trial, top-line data will be available in 2027. These data are anticipated to support the Biologics License Application (BLA) filing for OCU400 and potential approval in 2027. The Limelight clinical trial enrolled 140 patients who were randomized 2:1 into the treatment group and untreated control group across mutations, including RHO, and gene-agnostic arms. The gene-agnostic arm includes many genetic mutations, including those most prevalent: USH2A, XLRP, and PDE6B. The target population included patients with early- to late-stage disease among a broad RP population, including pediatrics. The primary endpoint is 12-month change in visual function assessed by LDNA (luminance-dependent navigation assessment), with improvement in lux level from baseline to 12 months. We also released positive long-term three-year Phase 1/2 data for OCU400 that build on our prior two-year results. The data demonstrate a sustained, clinically meaningful approximately two-line LLVA gain, reinforcing durable gene-agnostic benefit. OCU400 maintained a favorable durability, safety, and tolerability profile, with no new treatment-related serious adverse events or adverse events of interest emerging. With enrollment complete and these strong long-term data in hand, we are on track to begin the rolling BLA submission in 2026. Process validation and manufacturing activities are progressing well in support of the timeline, and planning and marketing initiatives are scaling up as well. We anticipate commercialization in 2027 in line with our commitments. As we prepare for what will ultimately be the global rollout of OCU400, we are pursuing regional partnerships that preserve Ocugen, Inc.'s rights to larger geographies while also generating near-term value for our shareholders. In 2025, we executed our first regional licensing agreement with QuanDan Pharmaceutical Company Limited for the exclusive Korean rights to OCU400. With upfront fees and near-term development milestone payments along with royalties, this was a valuable collaboration for Ocugen, Inc. and a critical step in the company's business development strategy. There are an estimated 7,000 individuals in the Republic of Korea with RP, equal to approximately 7% of the addressable U.S. RP market. This approach allows us to maximize total patient reach while retaining full commercial rights in the U.S. and Europe. Now let us move on to OCU410ST for Stargardt disease. OCU410ST holds the potential to target over 1,200 pathogenic mutations in the ABCA4 gene associated with Stargardt disease and other ABCA4-related retinopathies with a single one-time treatment. Stargardt disease affects approximately 100,000 patients in the U.S. and Europe combined, and approximately 1,000,000 people globally, with no approved treatment options available. The Phase 2/3 Guardian-3 pivotal confirmatory trial remains ahead of schedule. We anticipate top-line Phase 2/3 data in 2027, followed by the BLA submission. In January, we announced the peer-reviewed publication of our Phase 1 Guardian trial results in Nature Eye, which supports a favorable safety, tolerability, and efficacy profile of OCU410ST and its potential to provide clinically meaningful functional and structural benefits in Stargardt patients. This independent validation further strengthens the scientific foundation supporting the ongoing pivotal trial. Importantly, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency confirmed that data from our single U.S.-based trial can also support an EMA application. This alignment allows us to maintain the same timeline and budget efficiencies in Europe as we have with the OCU400 hurdle trial, streamlining our development efforts and bringing OCU410ST to patients in Europe sooner than originally anticipated. The program has also received Rare Pediatric Disease designation, further strengthening its regulatory positioning. I would like to explain ellipsoid zone (EZ) analysis in greater detail, as this is now an exploratory endpoint for both the Guardian-3 and ARMADA clinical trials. The ellipsoid zone is a hyperreflective band representing photoreceptor inner and outer layer segmentation. It indicates photoreceptor health and is a biomarker for photoreceptor structural integrity and metabolic health. EZ disruption precedes RPE loss and visible atrophy in geographic atrophy and Stargardt disease. EZ measurement is important because it provides early and sensitive detection. EZ changes occur before visible RPE atrophy expansion in GA and Stargardt progression. It also enables earlier intervention and more sensitive treatment effect detection in GA and Stargardt. Finally, EZ correlates to earlier functional therapeutic benefit, with an effect as early as one year compared to other measures such as visual acuity, with clinically meaningful effect at two years or more. Since all of our clinical trials aim to demonstrate benefit at one year, and we are targeting significant unmet medical needs, EZ is a relevant measure to show functional outcome in these trials. As EZ analysis has been established as a clinically relevant endpoint for dry AMD clinical trials, it was critical to incorporate this measure for both our Stargardt and GA trials. As shown in this bar graph, change from baseline at 12 months in treated fellow eyes across doses, excluding two subjects lost to follow-up and one subject with retinal detachment, demonstrated a mean of approximately 16% in lesion reduction in available treated eyes relative to untreated eyes. Specifically, 50% of OCU410ST-treated eyes achieved EZ preservation exceeding expected disease decline or atrophy progression at 12 months. This change-from-baseline structural preservation on spectral-domain OCT, quantified as approximately 16% lesion reduction in ellipsoid zone integrity, highlights meaningful photoreceptor protection and functional therapeutic benefit in Stargardt disease, underscoring the key differentiator of modifier gene therapy. Now let us turn to OCU410 in GA secondary to late-stage dry AMD. With approximately 2 million to 3 million GA patients in the U.S. and Europe combined, OCU410 represents a significant market opportunity. OCU410 is specifically designed to address multiple pathways implicated in the pathogenesis of dry age-related macular degeneration and offers a promising advantage over current treatment options that target only one pathway, the complement system. Currently approved treatment options require frequent intravitreal injections, about 6 to 12 doses per year, and are accompanied by various safety risks. For example, roughly 12% of patients develop wet AMD following treatment. There are no treatments approved for GA in Europe, and existing FDA-approved options have failed to demonstrate meaningful functional outcomes. OCU410 is therefore well-positioned to address this critical unmet need. In January, we announced positive preliminary 12-month data from approximately 50% of patients evaluated to date in the Phase 2 ARMADA clinical trial evaluating OCU410. The key findings were compelling. We observed a 46% reduction in lesion growth at 12 months across the medium- and high-dose groups combined versus control, with statistical significance at p = 0.015 in a cohort of 23 patients. We also saw a 50% responder rate, with patients achieving greater than 50% lesion size reduction versus control. To put this in context, currently marketed products have demonstrated only a 22% lesion reduction in two years. So at one year, OCU410 is already delivering more than double the benefit seen with existing therapies in twice the time. A subgroup analysis of patients with baseline lesion size of 7.5 mm² or greater, representing advanced atrophy, demonstrated a 57% reduction in lesion growth for the medium dose and a 56% reduction for the high dose compared with control. This suggests OCU410 may be even more effective in patients with substantial disease burden. The dataset also included encouraging 12-month Phase 1 findings, where OCU410-treated eyes demonstrated 60% slower loss of the ellipsoid zone, or EZ, compared to untreated fellow eyes. The 60% reduction in EZ loss rate indicates that OCU410 treatment is substantially slowing the rate of photoreceptor degeneration compared to the natural history observed in the untreated fellow eyes. We look forward to reporting the complete dataset from the OCU410 Phase 2 ARMADA trial this month and anticipate initiating Phase 3 in 2026. Let me also provide a brief update on our other programs. For OCU200, no serious adverse events or adverse events related to OCU200 have been reported to date across the Phase 1 dose-escalation cohorts, and trial enrollment is expected to be completed in 2026. Regarding our enhanced vaccine candidate, OCU500, NIAID intends to initiate the Phase 1 clinical trial in 2026. Finally, we created Arthroselix as a wholly owned subsidiary for our regenerative cell therapy assets, including NeoCart, with the goal to be independent through financing that will maximize value for Ocugen, Inc. shareholders and patients. We will provide further details as the process progresses. Across the portfolio, 2026 represents multiple defined inflection points. These include completion of enrollment for OCU410ST in early 2026, full Phase 2 data for OCU410 this month, interim pivotal data for OCU410ST in the third quarter, initiation of Phase 3 for OCU410 in 2026, and start of rolling BLA submission for OCU400 in the third quarter. Each of these milestones builds towards longer-term regulatory and commercialization objectives, and reinforces our commitment to file three BLAs in the next three years. Operationally, we also strengthened our executive leadership team with several appointments, including Abhi Gupta to Executive Vice President, Commercial and Business Development, bringing more than 20 years of experience across commercial strategy, gene therapy, and corporate development in the biopharmaceutical industry. Recently, Rita Johnson Green was named Chief Financial Officer. Rita's experience in financial strategy and capital planning supports our continued focus on disciplined resource allocation as our programs advance toward late-stage development and potential commercialization. And just this week, Paul Halsted joined us as Executive Vice President, Operations. Paul has more than 20 years of leadership experience in biologics and cell and gene therapy technical operations. He joins from Bristol Myers Squibb where, for over 16 years, he held leadership roles in manufacturing, launch, scale-up, and orchestration of reliable global supply chains, with a CAR T focus for the last five years. He will lead operations to strengthen execution and support the company's transition toward regulatory approvals and commercialization. I will now turn the call over to Rita Johnson Green to provide an update on our financial results for the quarter and full year ended 12/31/2025. Rita? Rita Johnson Green: Thank you, Shankar. I am thrilled to join the Ocugen, Inc. team and support the company through its imminent transition into a commercial enterprise. Starting with our fourth quarter results, research and development expenses for the three months ended 12/31/2025 were $10,700,000 compared to $8,300,000 for the three months ended 12/31/2024. General and administrative expenses for the three months ended 12/31/2025 were $6,100,000 compared to $6,300,000 for the three months ended 12/31/2024. Ocugen, Inc. reported a $0.06 net loss per common share for the three months ended 12/31/2025 compared to a $0.50 net loss per common share for the three months ended 12/31/2024. For the full year ended 12/31/2025, research and development expenses were $39,800,000 compared to $32,100,000 for the full year ended 12/31/2024. General and administrative expenses were $27,600,000 compared to $26,700,000 for the prior year. Ocugen, Inc. reported a $0.23 net loss per common share for the year ended 12/31/2025 compared to a $0.20 net loss per common share for the year ended 12/31/2024. Our current cash and cash equivalents extend our runway into 2026. This includes the recent raise of $22,500,000 through an underwritten registered direct offering of common stock led by RTW Investments. In addition, if the $30,000,000 in warrants from the prior Janus Henderson raise are exercised in full, it will extend cash runway into 2027. That concludes my financial update. Shankar, back to you. Shankar Musunuri: Thank you, Rita. We will now open for questions. Operator? Operator: If you would like to ask a question, please press star and the number 1 on your telephone keypad to raise your hand and enter the queue. If you would like to withdraw your question or your question has been answered, please press star and the number 1 again. We will take our first question from Michael Okunewitch from Maxim Group. Please go ahead. Michael Okunewitch: Hey, guys. Thank you so much for taking my question today. Congrats on all the great progress you have made. I guess to start off, given it is a 12-month primary endpoint for the Limelight study, how confident are you in the ability to turn around the data from when you hit on that top-line endpoint to actually releasing the top-line data within first quarter 2027? Shankar Musunuri: Thank you for the question. We are very confident that we will be able to hit our timeline. Michael Okunewitch: Alright. And then just for that endpoint, could you remind us of some of the modifications that you made for that particular navigation assessment course and why you decided to go with it as a primary metric for RP? Huma Qamar: In terms of the mobility test that we are using, proprietary to Ocugen, Inc., that is luminance-dependent navigation assessment (LDNA). It is the mobility test that was approved as the primary endpoint for Luxturna; that was called MLMT at that time. That was only designed for RPE65 mutation that covers only 1% to 2% of the RP landscape. This is a very sensitive and specific test. As you can see, this is the broad RP indication trial, covering all clinical syndromic, nonsyndromic, all the genetic mutations that cause RP are included. So this has uniform lux levels and intensity and lux levels from 0 to 9, and that has the ability to capture the change in real time, which is from the baseline up to 52 weeks. This was also aligned with FDA, a validated test, as well as this was approved by FDA, and the only test that can capture the real change with functional outcome, demonstrating the functional outcome in these mutations. We are the only trial globally that is covering the majority of the gene-agnostic mutations as we have covered this morning in one of our slides as well. Thank you. Michael Okunewitch: Thank you. That is certainly very helpful. And then last one before I jump back into the queue. For the Stargardt program, it is looking like there could be an approval from another company for a chronic therapy by the time you file for OCU410ST. So I wanted to know how this might impact the opportunity or pricing potential and if there is any reason that OCU410ST could not be complementary with other therapies as they come to market. Shankar Musunuri: I will take that. There are other therapies out there. Obviously, what we have shown—if you look at the data we published in Eye—in one year, again, I want to restate all our trials were able to show treatment benefit in one year, unlike other trials out there of two years or more. The data we showed in one year are compelling. It looks superior. Our goal is to show functional benefit. With the gene therapy, we are targeting the major pathways, which are complex in Stargardt and GA. With our modifier gene, we also have the ability to reset the homeostasis and create a healthy environment for retinal cells to survive. That is very important. We are not just trying to slow down the disease progression. Our genes have the ability to control the internal network, so there is a big difference. Also, this is one-and-done. If you have a one-and-done therapy, this will set the standard of care. We are not worried about other therapies if they come to the market first. It is good—those therapies will educate the market and create market education. We may be behind them, but it is okay, because we believe we are going to set the standard of care for Stargardt patients globally. Huma? Huma Qamar: Yes, I would like to add that this is the trial that we are also having the population three years of age and above versus the other trials that are very limited in the age population. Also, the inclusion/exclusion criteria are very globally representative. Other than that, OCU410ST is targeting early to advanced cases of Stargardt disease. If you look at the comparison, the safety, tolerability, and efficacy that we have seen in terms of lesion growth reduction and also the functional and structural outcomes have been trending in the right direction and are promising from the clinical standpoint as well. Michael Okunewitch: Thank you. It is certainly an exciting time for the space. I am looking forward to any further updates that you have. Huma Qamar: Thank you. Operator: Thank you. Our next question comes from the line of Boris Peaker from TD Cowen. Please go ahead. Shankar Musunuri: Boris? Mr. Peaker, you might be on mute. Boris Peaker: Apologies—just came off mute. So for the RP OCU400 rolling BLA, when would we get the FDA feedback on your CMC part of the filing? Shankar Musunuri: Typically, the CMC will be filed this year. Obviously, FDA has the right to request comments before, or they will wait for the entire BLA to be filed. Even though they are internally reviewing, you may not expect anything before the actual final clinical module is filed. Boris Peaker: Got it. And, speaking of the FDA, have you discussed the ellipsoid zone as an endpoint with the Agency? I am just curious what their thoughts are about it as maybe a secondary endpoint. Is it something that could be incorporated into a label claim? Would that make any kind of a difference from the commercial perspective? Just general thoughts on that endpoint. Shankar Musunuri: Ellipsoid zone—obviously, as we stated before, in all our clinical trials we are trying to show benefit because the diseases we are targeting have significant unmet medical needs. More delays and doing longer trials will take not only the resources from our perspective; it is not doing benefit to the patients. If you are able to show a benefit using primary endpoints we picked, which are acceptable, the EZ will be a secondary and some other analyses just to further support that we are demonstrating a good functional outcome or related to functional outcome. That is important. If you do longer trials, like two or three years, sure, we can look into multiple options. From FDA's perspective, they really focus on the primary endpoint. If you hit the primary endpoint, you will get the approval. If you hit the secondary, yes, you can include it in the product insert and the label. However, remember, in all our clinical trials, we have an obligation to continue them for five years for safety monitoring. That means one-year data are needed for filing. After that—second year, third year, fourth year, fifth year—we monitor the patients. We will continue to monitor them with these secondary endpoints. At any point the data are supportive, we can always add it to the label. From FDA's perspective, you have to hit the primary endpoint to get the product approved. Secondary is not necessary for approval. If you hit it, it is good; you can put it in the label. Boris Peaker: Got it. But I just want to understand also, have you spoken to docs—what is the commercial value? Let us say you could get an ellipsoid zone label claim—not the primary endpoint, but still mention this positive in the label. Would that really make a difference? Is this something that the docs actually care about, or is it just kind of scientifically nice and it raises curiosity more than anything else? Huma Qamar: Boris, this is Huma. So in terms of your question, with FDA alignment, yes, all the protocols are approved with exploratory secondary endpoints. In terms of EZ, it is the new hot topic for the clinicians in terms of functional outcomes and structural integrity for photoreceptors and retinal pigment epithelium. This is where FDA is leaning a lot based on these particular conditions such as Stargardt disease and geographic atrophy secondary to age-related macular degeneration. In fact, there has been buy-in and consensus from the IRD physicians as well as the geographic atrophy AMD surgeons as well. There is a real benefit to it, not only from the structural perspective but also from functional. This is now being taken not only nationally in the U.S., but also in Europe as well. Of course, there is clinical meaningfulness in terms of functional outcome for EZ. That is what we are seeing that could have potential meaning when we are going to file our claim commercially. Shankar Musunuri: Also, for geographic atrophy, Phase 3 has not started. That is why we are going to look at the entire Phase 2 dataset this month, and then we are going to propose the endpoints with FDA and EMA. We do have an opportunity to introduce EZ as a secondary endpoint if the data are trending the way we anticipate. Michael Okunewitch: Great. Thank you very much for taking my questions. Shankar Musunuri: Thank you. Huma Qamar: Thank you. Operator: Our next question comes from the line of Swayampakula Ramakanth from H.C. Wainwright. Please go ahead. Swayampakula Ramakanth: Thank you. Good morning, Shankar, Rita, and Huma. A couple of questions from me. Looking into the OCU410 program, in the Phase 2 study, the medium dose showed a 54% reduction versus the high dose, which showed a 36% reduction. I am trying to understand, as you go into your Phase 3 study, what is going to impact your decision for dose selection? Also, do you think that between these doses you are actually seeing some sort of a plateau effect in the transgene expression? Shankar Musunuri: Good morning. The data we released—obviously, the high dose had fewer numbers in there. I would wait until we get the complete dataset this month to make an inference. From the Agency's perspective, if the lower dose is showing equal or better effect, you would take that into Phase 3. That is standard practice. I suggest we wait. Typically, for our genes—and what we have seen in our RP studies too—these genes require a threshold. Once you hit the threshold, we did not see any dose response. We are going to evaluate carefully once we get the full dataset. Swayampakula Ramakanth: Thanks for that. In the subpopulation where the baseline lesions were greater than or equal to 7.5 mm², you saw a 57% reduction in lesion growth. As you get into the Phase 3 study, would you have any restrictions in terms of the size of the lesions, or do you plan to use the same criteria as in Phase 2, which was all comers? Shankar Musunuri: That is a good question. This is why we do Phase 2. We are going to carefully evaluate. We go from 2.5 to 22 mm², and we are going to evaluate and see. On the lower side, as you know, analytically, you will have more variability. Of course, we are going to look at where the average patients fall, even though in the larger trials people have done with a lot of data. We are going to look at all those metrics and see what is the right group to go into Phase 3. Swayampakula Ramakanth: Alright. The last question from me is on the OCU410ST program, where you are expecting to get the enrollment done this quarter and put up some interim data in Q3. In that dataset, what are we really looking for which can give us some indication of how the 2027 BLA filing is going to go, especially signals on either the structural side of things or on the functional side of things? What do you weigh more, and how should we be thinking when the data come out? Huma Qamar: In terms of the masked interim analysis that is coming later part of the year, it will be for 24 subjects—16 treatment and 8 in the control. This is the adaptive design; that is a unique approach we have taken. The data points we are going to present, as we have presented this morning as well, are the primary endpoint—the lesion growth reduction—as well as structural and functional outcomes, which include visual acuity. We are also looking into the ellipsoid zone, which is the functional outcome that is very unique, and that data were very well received from the Stargardt perspective that we recently presented at one of the conferences as well. We are going to look at all of that, and, of course, safety and tolerability will be there as well. As of right now, it is trending in the right direction. This is what we are looking to release as masked interim analysis for those subjects later part of the year. Swayampakula Ramakanth: Perfect. Thank you very much. Thanks for taking all my questions. Operator: Our next question comes from the line of Elemer Piros from EF Hutton. Please go ahead. Elemer Piros: Good morning. I would like to ask a question about the primary measure of visual function in the RP study. What would be a clinically meaningful improvement? Where do you draw the threshold toward that? Huma Qamar: Thanks for your question. As we said, it is a change in lux level improvement from baseline. There are a lot of mutations we are looking into. LDNA—luminance-dependent navigation assessment—is a validated protocol. That is what we are aiming for, and that is what our analysis is going to be based on. As I said earlier as well, there is a lot of heterogeneity with clinical diagnoses, and syndromic and nonsyndromic forms. The clinical meaningfulness is greater than or equal to one lux level. Shankar Musunuri: As Huma has stated, we validated this course during Phase 3 with real patients, and the course looks very robust. Based on our KOL input, they are extremely happy with this. Elemer Piros: Thank you. What are some of the secondary endpoints that you would also look at to support that primary? Huma Qamar: The secondary endpoints are visual acuity, low-luminance visual acuity, and patient-reported outcome scores. We will be looking into these, and that is very well agreed and aligned with the FDA. Elemer Piros: One last question. Are both eyes treated? Could you remind us? Huma Qamar: Yes, that is correct. Yes, if both eyes meet the inclusion/exclusion criteria, both eyes are treated. It is a 2:1 randomization, a single subretinal injection, and the control group will have a crossover after one year. Elemer Piros: And then— Shankar Musunuri: The study is the worst-eye for analytic analysis per SAP. So you would compare the worst eye to the control group. Elemer Piros: The worst eye in that group. Shankar Musunuri: Yes. The study eye is compared to the control group. Elemer Piros: Thank you so much. Shankar Musunuri: Thank you. Operator: Our next question comes from the line of Daniil Gataulin from Chardan. Please go ahead. Daniil Gataulin: Hi. This is Steven on for Daniil. Thanks for taking my question. For dry AMD, you mentioned a 50% responder rate. Were there any underlying characteristics that made a patient more likely to be a responder? Huma Qamar: Are you talking about OCU410 GA? Yes. In terms of the responder rate, we have the inclusion/exclusion criteria, which were very uniform across the groups. Baseline characteristics included the mean age—we were looking at GA diagnosed at a certain age, with the mean in the mid-70s. We were also looking at the lesion size, which is pretty much well-versed with the OAKS and DERBY trials that Apellis got approval on—7.5 mm² was the mean, up to 8.03. In terms of the baseline characteristics, the responders responded on the medium dose as well as on the high dose. There was not really any other unique criterion that we would cite at this point until we get our final clinical study report. At this point, it seems like it was uniform across all dose groups. Daniil Gataulin: Got it. Thank you. Shankar Musunuri: Thank you. This concludes the Q&A portion. Operator: I will now turn the call back over to Chairman, CEO, and Co-Founder, Dr. Shankar Musunuri. Shankar Musunuri: Thank you, Operator. 2025 was marked by important clinical progress, strategic business development, and essential financing accomplishments across the organization. We are entering 2026 with strong momentum and a clear line of sight to multiple catalysts that will further advance Ocugen, Inc.'s position as a biotechnology leader in gene therapy for blindness diseases. We expect to deliver full Phase 2 data for OCU410 this month, complete enrollment for OCU410ST, initiate Phase 3 for OCU410 in geographic atrophy, and begin a rolling BLA submission for OCU400. I want to thank our employees, investigators, patients, and shareholders for their continued support. We look forward to updating you on our progress. Have a great day. The meeting is now concluded. Operator: Thank you all for joining. You may now disconnect.
Operator: Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the EyePoint Pharmaceuticals, Inc. Fourth Quarter 2025 Financial Results and Recent Corporate Development Conference Call. There will be a question-and-answer session to follow. Please be advised that today's conference is being recorded at the company's request. I would now like to turn the call over to George Elston, Executive Vice President and Chief Financial Officer of EyePoint Pharmaceuticals, Inc. Sir, please go ahead. George Elston: Thank you, and thank you all for joining us on today's conference call to discuss EyePoint Pharmaceuticals, Inc.'s Fourth Quarter and Full Year 2025 financial results and recent corporate developments. With me today is Dr. Jay Duker, President and Chief Executive Officer of EyePoint Pharmaceuticals, Inc. Jay will begin with a review of recent corporate updates and discuss our clinical programs for DuraVu in wet AMD and DME. I will close with commentary on the fourth quarter and full year 2025 financial results. We will then open the call for your questions where we will be joined by Dr. Ramiro Ribeiro, our Chief Medical Officer, and Mike Campbell, our new Chief Commercial Officer. Earlier this morning, we issued a press release detailing our financial results and recent corporate developments. A copy of the release can be found in the Investor Relations tab on the company website at ipoint.bio. Before we begin our formal comments, I will remind you that various remarks we will make today constitute forward-looking statements for the purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. These include statements about our future expectations, clinical developments, regulatory matters and timelines, the potential success of our products and product candidates, financial projections, and our plans and prospects. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, which is on file with the SEC, and in other filings that we have made or may make with the SEC in the future. Any forward-looking statements represent our views as of today only. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our views change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. I will now turn the call over to Dr. Jay Duker, President and Chief Executive Officer of EyePoint Pharmaceuticals, Inc. Jay Duker: Thank you, George. Good morning, everyone, and thank you for joining us. 2025 is defined by significant progress and achievement for EyePoint Pharmaceuticals, Inc. as we made important advances that set the stage for and potential value creation for the year ahead. As a result of our exceptional clinical execution, driven by our derisked and patient-centric programs, our lead asset DuraVu is on track to deliver top-line data in wet age-related macular degeneration, or wet AMD, beginning in mid-2026. In parallel, we advanced DuraVu as the only tyrosine kinase inhibitor, or TKI, program in diabetic macular edema, or DME. We are pleased to report that as of last week, the first patients were dosed in both pivotal Phase 3 DME trials. With a strong cash position that is expected to fund operations into 2027, and multiple inflection points on the near-term horizon, we are entering a transformative period for EyePoint Pharmaceuticals, Inc. with significant momentum. Our conviction in DuraVu’s blockbuster potential is underpinned first and foremost by its compelling clinical profile. In our Phase 2 trials in the largest retinal disease markets, a single dose of DuraVu demonstrated durable efficacy with improved vision and tight anatomical control. Importantly, DuraVu has a favorable safety profile with no safety signals in over 190 patients across four completed clinical trials. The safety profile so far remains consistent in the ongoing Phase 3 Lugano and LUCIA trials for wet AMD, based on continued masked internal safety review and two interim reviews conducted by the independent data safety monitoring committee. In addition to its robust clinical profile, we continue to believe in the potential for every six-month dosing via standard in-office intravitreal injection, a best-in-class delivery technology, and a novel multi-MOA that inhibits VEGF, PDGF, and IL-6 via the JAK1 receptor with no Tie2 inhibition, which are the key drivers of its differentiated profile. This unique profile positions DuraVu to address both VEGF-mediated vascular leakage and IL-6–mediated inflammation that contribute to disease pathogenesis in wet AMD and DME, thereby potentially enabling improved long-term outcomes for patients with fewer injections. Our confidence is also grounded in our established and clinically rigorous approach throughout DuraVu’s development. Our Phase 3 wet AMD program was intentionally designed to inform real-world practice and generate meaningful data for the retinal community by comparing DuraVu to on-label aflibercept as the control. Additionally, we will be evaluating statistical reduction in treatment burden and six-month redosing to support a compelling and relevant label. Based on the success of our large Phase 2 DAVIO-2 trial, and with our proven regulatory pathway and strong execution to date, we believe our wet AMD program is uniquely derisked and optimized to support success. We look forward to reporting top-line data beginning in mid-2026. The clinical and regulatory rigor that defines our approach also extends beyond wet AMD as we work to position DuraVu for multiple indications. We are pleased that randomization is now underway for both COMO and CAPRI, our two pivotal Phase 3 trials in DME, where we expect to drive rapid enrollment by leveraging our preclinical trial infrastructure and investigator network. In line with our wet AMD program, our DME program follows an established noninferiority design with an on-label standard-of-care control and redosing every six months. It was similarly informed by impressive Phase 2 data from the VERONA trial, where eyes treated with DuraVu demonstrated meaningful visual and anatomic improvements as early as four weeks. We anticipate top-line data in 2027 and look forward to building upon our strong track record of clinical execution as we advance DuraVu through our Phase 3 DME program. We believe that DuraVu is well-positioned to be the first to market among all current investigational sustained-release programs in both wet AMD and DME with a potential best-in-class profile, and we remain focused on building DuraVu into a durable franchise targeting the largest retinal disease markets. With a combined current global market of $10 billion and growing, wet AMD and DME make up the vast majority of the global branded retinal disease market. DuraVu’s unique MOA, robust clinical data package, proven release technology, and attractive storage and administration benefits offer a compelling value proposition that we believe will address the longstanding need for innovation and support strong commercial positioning. As part of our ongoing commercial readiness efforts, we are thrilled to welcome Michael Campbell as our new Chief Commercial Officer. Mike is a seasoned commercial leader with a proven track record of successful product launches and oversight of prominent ophthalmology franchises, including Lucentis and Xiidra. As we prepare to deliver on EyePoint Pharmaceuticals, Inc.’s next milestones, including potential approval and transformation into a fully integrated commercial organization, Michael’s deep commercial expertise will be instrumental as we position DuraVu for a successful U.S. launch. In addition to strengthening our commercial leadership, we continue to expand operations at our 41,000 square foot cGMP manufacturing facility in Northbridge, Massachusetts. The facility has been online for over a year, supported by about 60 full-time employees, and continues to not only support the CMC submission for a planned New Drug Application (NDA) but also commercial supply. As we near regulatory submission, we are preparing for pre-approval inspection, underscoring our growing independent commercial readiness and commitment to ensuring that we are well equipped to deliver DuraVu to patients if approved. Before passing it over to George to review our financials, I would like to thank the entire EyePoint Pharmaceuticals, Inc. team for your continued dedication to improving vision and patient outcomes. We are proud to advance our therapeutics for the benefit of the entire retina community and grateful to the patients, study coordinators, and clinical investigators who make our progress possible. As we look ahead, we are excited about the upcoming milestones and the opportunities in store for us to extend our leadership in sustained ocular drug delivery. I will now turn the call over to George. George Elston: Thank you, Jay. We ended 2025 with a strong balance sheet of $306 million in cash and investments, driven by continued stewardship of our resources and a $173 million follow-on financing in October. As the financial results for the three months and full year ended 12/31/2025 were included in the press release this morning, my comments today will be focused on a high-level review of the quarter. For the quarter ended 12/31/2025, total net revenue was $600,000 compared to $11.6 million for the quarter ended 12/31/2024. The decrease was primarily driven by the recognition of remaining deferred revenue related to the company's agreement for the license of YUTIQ product rights in 2023. Operating expenses for the quarter ended 12/31/2025 totaled $71 million compared to $57 million in the prior-year period. This increase was primarily driven by the ongoing Phase 3 trials for DuraVu in wet AMD and DME. Net non-operating income totaled $3 million, and net loss was approximately $68 million, or $0.81 per share, compared to a net loss of $41 million, or $0.64 per share, for the prior-year period. Turning to the full year ended 12/31/2025, total net revenue was $31 million compared to $43 million for the year ended 12/31/2024. The decrease was primarily driven by the recognition of remaining deferred revenue related to the company's agreement for the license of YUTIQ product rights in 2023. Operating expenses for the full year ended 12/31/2025 totaled $275 million versus $189 million in the prior-year period. This increase was primarily driven by the ongoing Phase 3 trials for DuraVu in wet AMD and DME. Net non-operating income totaled $12 million, and net loss was $232 million, or $3.17 per share, compared to a net loss of $131 million, or $2.32 per share, for the prior-year period. Cash and investments on 12/31/2025 totaled $306 million compared to $371 million as of 12/31/2024. We expect the cash and investments on 12/31/2025 will enable us to fund operations into 2027, well beyond key milestones and NDA preparation for the Phase 3 wet AMD program in 2026 and fully funding the Phase 3 pivotal DME program. In conclusion, we are incredibly pleased with EyePoint Pharmaceuticals, Inc.’s progress in 2025 and are well capitalized to continue advancing DuraVu through both of our late-stage development programs. I will now turn the call back over to Jay for closing remarks. Jay Duker: Thank you, George. EyePoint Pharmaceuticals, Inc.’s progress in 2025 reflects the strength of our programs and our consistent execution. As we prepare to drive value through transformative catalysts in 2026, we will continue to be guided by our derisked, clinically rigorous, and patient-centric approach. We are well positioned to deliver on our near-term priorities, including reporting top-line data for the Phase 3 Lugano trial anticipated in mid-2026 with LUCIA data closely following, completing enrollment in our pivotal Phase 3 DME program in 2026, and preparing for regulatory filing in wet AMD assuming positive Phase 3 data. Thank you all for your attention this morning. I will now turn the call over to the operator for questions. Operator: Thank you. As usual, we will try to get to as many questions as we can through the course of the call. Please limit the number of questions you ask to one, to give others a fair chance to participate. One moment while we compile our queue. Our first question is going to come from the line of Tessa Romero with JPMorgan. Your line is open. Please go ahead. Tessa Romero: Good morning, guys. Thanks so much for taking the question. Jay, George, can you clarify the rate of ocular AEs that you have seen across your cumulative safety database with DuraVu, in particular around the incidence of vitreous floaters and cataracts? And then, relatedly, what specifically has the physician's feedback been around your safety profile? Thank you. Jay Duker: Good morning, Tess. Sure, happy to address that. As you probably recall, we have treated over 190 patients and completed trials of one Phase 1 and three Phase 2 trials. And the number of cataracts that were measured by the 191 patients is 5.8%. In contrast, if you just look at the DAVIO-2 data, the cataracts in the DAVIO-2 study in the study arms was approximately 8%. In the EYLEA control arm, it was numerically higher; it was 9%. So this is an elderly population. You do expect cataracts. But, of course, in the controlled DAVIO-2 trial, there was no mismatch between the cataracts at all. With respect to vitreous floaters, once again, in the entire population, 5.2% of the DuraVu patients reported floaters, which is, again, consistent with what you might see in any type of study that has injections into the eye. So I think to answer the second part of the question, which is how do the clinicians perceive it, I think one of the main reasons that we were able to enroll the wet AMD trial so rapidly is the doctors had really good Phase 2 data to evaluate both the efficacy and the safety of our drug. And I think that gave them great confidence in enrolling patients. I think, again, I would like to make one more note on safety and efficacy. We think of visual acuity as the primary efficacy endpoint, which it is for all of these studies, but visual acuity also is a safety outcome. And, again, just to remind the listeners, in the DAVIO-2 trial, our treated patients in wet AMD gained vision. And, in fact, in the unsupplemented eyes in DAVIO-2, the treatment arms gained 2.1 letters over the course of the trial, which is actually numerically greater than the EYLEA arm gain. The EYLEA arm, again, at that point was getting three injections over that time frame because it was on-label EYLEA. So, to summarize, we are very comfortable with our safety. We have had no ocular or systemic SAEs attributed to our drug, and in those four prior trials, no safety signals. Thank you. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Yatin Suneja with Guggenheim. Your line is open. Please go ahead. Yatin Suneja: Just a quick one on the regulatory front. Just love to hear from you how are you thinking about recent sort of FDA chatter around single study–driven regulatory approvals. Does that change your strategy? Just curious what is possible. And then, Jay, I appreciate your comment on the safety. Clearly, it has been pretty good across Phase 2 studies and also Phase 3 blinded review that you have provided. Anything on opacity that you can comment? Like, how are those numbers relative to what we see with other TKIs in development? Thank you. Jay Duker: Thanks for the question, Yatin. So for the first question, the regulatory front, yes, I think in general, we would all welcome a more rapid and less expensive pathway to drug approvals. But as you heard this morning, and I think most listeners know, we have two identical Phase 3 wet AMD trials underway that are reading out this year. If, in fact, the FDA would allow us to file with a single trial, our second trial is only two months behind, and so overall, I do not know that that would give us any particular advantage in the single trial. In DME, we have two simultaneous trials that we expect to read out in 2027. And given that other regulatory agencies around the world are probably still not aligned with single trial, we do not believe we have any reason to alter our approach for these two indications. Future indications, of course, we will discuss with the agency. With respect to single trial in retina studies, I think that it is certainly something the agency may be considering in the future. Of course, there are rules around single trial filing that the FDA updated in 2023. Those rules are already out there, and in order to do that, you not only need to have a large trial but you need confirmatory evidence that your drug is active if it is single trial. Of course, in the case of rare diseases, there are exceptions that are made, but wet AMD and DME, unfortunately, are not rare diseases. So with regard to the regulatory pathway, we think our pathway is derisked. We have taken the noninferiority approach, which is, you know, the approach essentially that five of the last approvals have taken, and we have two trials in each of those large indications already in motion. With respect back to safety for a second, opacity is a sign that the masked investigator can see when they look into an eye. They see if there is a blockage in their ability to look into the eye, either in the back of the eye in the vitreous or the front of the eye in the anterior chamber. In our DAVIO-2 trial, we had about a 1% rate of vitreous opacity. We had no rates of anterior chamber opacity. That has not been seen at all with DuraVu in any of the treated eyes, and we would not have expected it. DuraVu is designed to hold the drug until the drug is fully eluted, so we have no free-floating drug particles. We have not seen any migration of the inserts. The inserts so far, at least, have not been reported in humans to break up into pieces. They just slowly bioerode and release their payload, which again, I would like to remind everybody, our scientists have been able to upgrade the inserts so that they are 94% payload; they are only 6% matrix. So we have not seen any anterior chamber opacity, and we would not expect to. The vitreous opacity percentage is low. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open. Please go ahead. Yigal Nochomovitz: Yeah. Hi, Jay and team. Thank you. I am just curious, with regards to the conduct of the wet AMD trials before they read out this summer and into the early fall, will there be additional looks at masked safety? What will the cadence of those be, and will you be reporting that to us as you proceed? Thank you. Jay Duker: Thanks, Yigal. We have got Ramiro on the line, our CMO. So, Ramiro, feel free to answer that question about continued safety looks in the wet AMD trials. Ramiro Ribeiro: Hey, Yigal. Good to hear from you. So we have, as a safety monitoring body for the studies, both internal masked review that we do on an ongoing basis as well as the independent data monitoring committee that reviews the unmasked data. The last DMC meeting was November. At that point, they reviewed the data from patients, and I remind you that at that point, we had over 25% of patients getting the second dose. The safety profile of DuraVu so far has been consistent with our previous experience in the Phase 1, Phase 2 studies with nothing new to be aware of. Our next DMC meeting is scheduled in May, so that is going to be the next opportunity for that group of physicians to review the unmasked data and provide updates to us. Yigal Nochomovitz: Okay. Thank you. And just one question on biomarkers. I know you identified IL-6 recently. I am just wondering what additional biomarker work may you be doing to further explore the activity profile of vorolanib. Jay Duker: You know, thanks for that question. Additional biomarker work around the JAK1 receptor and its ability to block downstream effects of IL-6. We will have additional data on that that we are presenting at ARVO in May. We have additional ongoing studies to really try to assess the impact of that in humans. With respect to the rest of the potential receptors, we did a very extensive evaluation of the kinome last summer at the time that we discovered that vorolanib was a potent inhibitor of JAK1 with an IC50 of about 80 nM, and we did not discover at the time any other significant receptors involved in retinal disease, either positively or negatively, that vorolanib was active against. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Claire Dong with Jefferies. Your line is open. Please go ahead. Claire Dong: Hi, good morning, guys. Thanks for taking my question. So just in terms of the durable and multi-mechanistic profile beyond VEGF inhibition, how prominently do you expect this mechanistic differentiation to really be featured in your regulatory discussions and maybe eventual commercial messaging as well? And then, is there any plan for you to report more preclinical evidence of the IL-6 inhibition MOA in the future? Thank you. Jay Duker: Yeah, Claire, great question. Thanks for it. And a bit complicated because, you know, the story, I think, is still unfolding. Ultimately, what we all want is better visual acuity—our patients certainly, and the physicians who treat them. And so the great thing about what we do is eventually it is all about the data. And what we hope to show, and really, if we can show it, I think, primarily in our DME trials, is that that additional IL-6 blockage does give a more rapid onset of visual acuity improvement. That is what we showed in the VERONA data. If you recall, as early as week four, the treatment arms with DuraVu had already separated from EYLEA. We were already four to five letters better and about 40 microns drier than EYLEA. And we believe most likely that is the effect of the IL-6. IL-6 has also been implicated in wet AMD. I think it may be perhaps a little more difficult to winnow out the effects of IL-6 in the wet AMD population. But I certainly would not rule out that we might end up with better visual acuity in the wet AMD population overall. Again, I mentioned earlier with respect to subgroup analyses, the subgroup in DAVIO-2 that was not rescued ended up with slightly better vision than on-label EYLEA. With respect to regulatory, I am going to let Ramiro take a stab at that. And with respect to commercial, Mike Campbell is here, and maybe Mike can try to take a stab at how that might affect us commercially. Ramiro, why do you not go ahead first? Ramiro Ribeiro: Yeah. Sure. Thanks, Claire, for that question. So the regulatory path that we are following with both the wet AMD and the DME studies is a noninferiority approach. So if we show that BCVA are similar to the control arm, that, of course, might be sufficient for regulatory agencies. With that, for both wet AMD and DME study, as part of our analysis plan and hierarchical testing, we are going to be testing for superiority on the BCVA. And as Jay mentioned, there is a body of evidence suggesting that IL-6 has a role in both DME as well as wet AMD. So we are going to be investigating that in our Phase 3 clinical studies. Jay Duker: Thanks, Ramiro. And, Mike, if we are able to show this additional benefit of IL-6, can you perhaps comment on the commercial aspects of that? Mike Campbell: Yeah. Thank you, Jay, and hi, Claire. The commercial approach, specifically with visual acuity and safety—and as Jay mentioned, our unique MOA—gives us a real opportunity here with IL-6 as part of that complete package. I mean, the messaging around this and the opportunity to commercialize gives patients and providers a real opportunity potentially to have a best-in-class, durable approach to treating wet AMD and DME. As Jay mentioned, if there is an opportunity to be able to show the benefit of IL-6 in the DME population, that has a real meaningful commercial opportunity to really separate yourself in the marketplace. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Graig Suvannavejh with Mizuho. Your line is open. Please go ahead. Graig Suvannavejh: Hey, good morning. Thanks for taking my question, and congrats on the first dosing in your DME Phase 3 studies. Maybe a question for Mike as the new Chief Commercial Officer. As you come into the company, how are you thinking about commercial prep for the potential launch of DuraVu? What are the key steps that are needed at EyePoint Pharmaceuticals, Inc. over, like, the next six, twelve, eighteen months to ensure an optimal U.S. commercial launch, especially when you might be going head-to-head in the competitive landscape versus a competitor? Mike Campbell: Yeah. Thank you, Graig. You know, there is a complete go-to-market strategy and approach, for sure. And as we think about the opportunity here—and to your point, potentially even having a competitor in the marketplace—there is a lot of precision that goes into a go-to-market approach, especially in the specialty retina marketplace. So it is areas, for example, around not only positioning and messaging, the market research, the pricing research; all of that is priority, along with patient access and services. I mean, we can have a fantastic—and we believe we will have a fantastic—opportunity here, but if you cannot really get good at allowing patient access through coverage and reimbursement, then it can really hinder you. And so there is a lot of effort that we are putting behind making sure we have the right rigor to come to market and make it easy for doctors to be able to use DuraVu, but also easy for patients to access DuraVu. And just lastly, I would also add that there is a lot of really good work that is going on and will continue to go on around coverage with the payers, and good payer research that we have done. Graig Suvannavejh: Jay, if I could just quickly follow up: your Phase 3 trial designs in DME are just slightly tweaked or different from the Phase 3 trial designs in wet AMD. Just wondering if you could point us to reasons why slightly different, in terms of kind of loading doses, maybe maintenance doses—just things like that. Jay Duker: Sure. Go ahead, Ramiro. Ramiro Ribeiro: Great. Thanks for the question. So when we look at our DME study in comparison to our wet AMD program, there are two main differences. The first one is on the control arm. For noninferiority studies, the FDA mandates that you use on-label medication, and the on-label regimen for aflibercept in DME is five loading doses followed by every eight weeks. So that is how we are going to be dosing patients in the control arm. The other difference is that for the DME study, we are now dosing DuraVu at day one. If you recall from the wet AMD study, we dosed DuraVu after the preloading dose at week eight. The reason for doing what we are doing in the DME study—which is to dose at day one—is to try to replicate the findings that we had in our Phase 2 study. If you recall from the Phase 2 study, we dosed patients on day one with aflibercept plus DuraVu compared to aflibercept alone. And then in that study, we showed a greater improvement in BCVA and CST early on in the study at week four. And we believe one of the reasons could be because of the role of IL-6/JAK1 in the DME disease. So we believe that if we can replicate those findings in the Phase 3 study, providing patients an earlier improvement in BCVA and CST is going to be something that is going to be advantageous for our patients. Operator: Thank you. One moment for our next question. Our next question comes from the line of Debanjana Chatterjee with Jones. Your line is open. Please go ahead. Debanjana Chatterjee: Hi, thanks for taking my question. One more on safety. So we saw a handful of cases of uveitis and iritis in a competitive trial. Could you just tell me again about your broader clinical experience in terms of this kind of inflammatory signals, even if mild or moderate, in your view? And also, is there anything intrinsic to your insert design or the overall product profile that you believe mitigates these kinds of events? Jay Duker: Sure, Debanjana. Thank you very much for the question. With respect to intraocular inflammation, the study is usually divided into iritis, which is inflammation in the front of the eye and, while somewhat troublesome, not typically sight-threatening; vitritis, inflammation in the back of the eye, a little more serious; and uveitis, which usually refers to inflammation in both those cavities. We do know historically biologics can cause inflammation, and there are various rates to the biologics. When they were first out, there were papers that were written that up to, you know, 10% or more of patients at certain times were getting at least mild inflammation. Obviously, inflammation is not ideal, and one of the real issues, even in mild inflammation, is the concern that it might actually be an infection, which can be much more serious. So with respect to the 191 patients that we have treated in those four studies, we had two cases of iritis, and both cases were mild, treated with topical drops, resolved quickly without any sequelae. We had no reported cases of uveitis, no reported cases of vitritis. So the overall intraocular inflammation rate is just those two patients, about 1%. We are optimistic and confident that our drug should not cause inflammation to any large degree because vorolanib, of course, is a small molecule. It is not a biologic. We are not gene therapy. And the matrix that we are using, that 6% matrix in the inserts—that matrix has been used in our prior FDA-approved products, and there were virtually no, very low rates of inflammation reported in those previous products. So, given that, and given the safety profile we have obviously seen in humans, which I just reported, and the safety we have seen in animals, intraocular inflammation is not something we are very concerned about. Thank you. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Colleen Kusy with Baird. Your line is open. Please go ahead. Colleen Kusy: I know we still have a number of months before the top-line readouts of the wet AMD studies, but just a clarifying question on the reduction in treatment burden, the secondary endpoint. How do you plan on measuring that? Would that include the loading doses, or is that measured after the loading doses? Just curious on the math there and just what our expectations should be for reduction in treatment burden. And then just an addendum to that, what would be clinically meaningful? Thank you. Jay Duker: Colleen, thanks for the question. First of all, the reduction in treatment burden is to be measured after the load. Since all the patients in the wet AMD trials get loaded with three monthly injections, the treatment burden clock, so to speak, starts after that. So in the first year of the trial, the DuraVu patients mandated should receive two DuraVu injections. The EYLEA arm, the control arm, has a mandated five injections. So if there is no supplementation in the entire study, we would expect that 60% reduction in treatment burden in the DuraVu arm. I can tell you that our expectation is there will be some supplementation probably in both arms, just like there was in the DAVIO-2 trial, although we do believe it is likely that there will be less supplementation in the Phase 3 for various reasons. But if you apply the supplementation rates that we saw in DAVIO-2 to the Phase 3, we would have an approximate 40% reduction in treatment burden, which is excellent. So I think from the perspective of what the doctors want to see, I think any kind of significant reduction in treatment burden will be welcome because supplementation with a TKI in the real world is not failure. Doctors do not mind doing injections; they just want to do fewer, number one. And, obviously, the more important thing is they want to get better visual acuity for their patients in the long term. So the concept of sustained release is not about reduction in treatment burden. That is a positive side effect. But what we really want to see is better vision control in the long term, and we believe we can provide that. I think some doctors may be excited about the possibility of using two MOAs, having a ligand-blocker biologic and having a receptor-blocking TKI at the same time. And that may prove to be better long-term visual acuity results. So this whole idea of supplementation, it has a strict definition within the trials, but in the real world I think the doctors will approach it a little bit differently. Now, as part of the trial, I think, Ramiro, maybe can you comment on the superiority testing that we will be doing about treatment burden? Ramiro Ribeiro: Sure, Jay. So our hierarchical testing, number one, is going to be, as I mentioned before, the noninferiority on BCVA. The next one is going to be superiority on treatment burden. This study, of course, is well powered for the primary endpoint in noninferiority BCVA. For this key secondary endpoint, the treatment burden, the study is also well powered, and we should be able to detect the difference even if the difference is 10% or 7%. Operator: Thanks. One moment for our next question. Next question will come from the line of Lisa A. Walter with R. Your line is open. Please go ahead. Lisa A. Walter: Hi. Good morning, team, and thanks for taking our question, and congrats on the progress. Maybe just one on safety. Wondering how we should think about the safety profile in Lugano and LUCIA as it relates to DAVIO-2. I believe in DAVIO-2 the two milligram arm performed better on things like eye pain, cataract, and floaters versus the three milligram arm. But my question is, how much of the safety differences in DAVIO-2 are due to the two arms using a different number of inserts versus a different amount of drug? And how might this impact safety in Lugano and LUCIA where two inserts are being used, like the two milligram arm in DAVIO-2, but the amount of drug is closer to the three milligrams that was used? Any color here would be helpful. Thanks. Jay Duker: Sure, Lisa. First of all, with respect to dosage, we have animal data that shows no maximally tolerated dose of vorolanib so far, and we dosed animals with approximately ten times higher dosing than we have ever done in a human. So we do not believe there will be any sign of vorolanib toxicity at the current doses that we are using, even with reinjection. So, no, I do not believe any of the AEs reported have been due to vorolanib. And I would extend that to say, you know, so far, all the TKIs that have been used for wet AMD, as far as I know, there are no AEs that have been suggested to be due to the drug itself. So these drugs at the doses we are using appear to be very safe in the back of the eye. With respect to insert number, the numbers are too low to really know, and that is not something we, you know, are really essentially considering. There was a higher incidence of floaters in DAVIO-2 with the three milligram/three insert versus a two milligram/two insert, and, you know, maybe it had to do with the number of inserts. But given that we are using two inserts in the Phase 3s and ongoing, it is not much of a concern. And especially because the rates were low, and we had nobody report decreased vision due to the inserts. We had nobody leave the trials due to the inserts. Nobody has had to have the inserts removed. So from a clinical outcomes perspective, we are not concerned either about the number of inserts we are using or the doses of vorolanib that we are achieving. I think that the safety in the entire cohort really speaks for itself. Operator: Thank you. And one moment for our next question. Our next question will come from the line of Yale Jen with Laidlaw & Company. Your line is open. Please go ahead. Yale Jen: Good morning, and thanks for taking the questions. And I recall in the press release, you mentioned that there is a floater and the mechanism of action of the drug could potentially reduce that. So could you elaborate a little bit more on that? Jay Duker: I am sorry, Yale. You asked about the mechanism of action reducing the floater—something of that nature? No. I am not sure I followed that, Yale. The mechanism of action of vorolanib includes its anti-VEGF effect, potentially the anti-PDGF effect to give a benefit to fibrosis, and potentially the anti–IL-6 effect to give a better and quicker result in visual acuity. I do not think the MOA would have any effect on patients' perception of floater. And, again, given that the rate of floaters for the whole 191 patients was 5.2%, I just do not think it is a concern. Yale Jen: Okay. Yeah. I just meant it says the preventive free-floating drug particles. Jay Duker: Okay. That is the design of the inserts. And once again, the design of the insert, as we have already stated—we design these inserts so they control drug release until the drug is gone. That is the whole purpose of a sustained-release insert: to control the drug release at therapeutic levels for an extended period of time. And so we would not expect free-floating drug particles. We have not seen free-floating drug particles in any of the animal studies, and so far, there have been no reports of free-floating drug particles in the eye. So that is more of an effect of the delivery system, not the MOA of vorolanib. Yale Jen: Okay. Great. That is very helpful to clarify that. And then maybe a quick one. How many sites for the COMO and the CAPRI study in total? And are some of those ex-U.S. versus in the U.S.? Jay Duker: Yeah. Ramiro, why do you not take that question, please? Ramiro Ribeiro: Yep. So we have both studies as global studies. So we have sites in the U.S. as well as outside of the U.S. We are planning to have approximately 140 sites across both studies, and we are leveraging a lot of the infrastructure that we used for our wet AMD program. So a lot of these sites that are part of DME—most of them—were also part of our wet AMD program. And what was very interesting and very encouraging for us is that all sites from the wet AMD program that we invited to participate in the DME studies agreed to be part again of the DME program, which, again, I think highlights the confidence of the investigators in our clinical program. Operator: Thank you. And one moment for our next question. Our next question comes from the line of Daniil V. Gataulin with Chardan. Your line is open. Please go ahead. Daniil V. Gataulin: Hey, good morning, and thank you for taking my question. In your conversations with KOLs, what are you seeing in terms of which patients they would initially be willing to focus on when considering vorolanib? For example, are they thinking more of stable patients versus newly diagnosed patients or patients with high burden? And second part is, how do you expect the steps or requirements to affect the adoption of vorolanib? Thank you. Jay Duker: Thanks, Daniil. First of all, with respect to patient selection, I think we are all speculating a little here because we do not have the Phase 3 data and the label. But if one extrapolates from the Phase 2 data, I think that at the beginning, where most doctors will try it, is their patients who are being treated more frequently than they would like—every four weeks, every six weeks, every eight weeks. I think that will be the initial adoption of it. And as doctors get comfortable with its therapeutic profile and its safety, I think it will get expanded. Now I will modify that a bit, which is if we can show in the clinical trials that we can deliver better vision than EYLEA on-label, or that we are antifibrotic, or we have neuroprotection—other benefits that are potentially going to, that we might see—then I think the adoption will be much broader than that. I mean, if we can show that we are antifibrotic, I think retinal physicians will acknowledge the fact that fibrosis in the long term is an important cause of visual loss, and if you can prevent it from happening, you will result in improved vision over the years. So I think it will start off with the eyes that likely need a lot of treatment, but it may expand well beyond that. With respect to step therapy, we would not anticipate it would be an issue. First of all, again, we do not know what our label will look like, of course, but our study in wet AMD is being done with a three-injection load. So if the label contains use of DuraVu after three injections of an anti-VEGF, for example, then that automatically puts us beyond the initial injections into a branded drug. I will say we are looking into the possibility of our different MOA and our six-month efficacy, if it is there, in the IL-6 blockage—if we can show a benefit there—to be considered different than the ligand blockers, which may also be advantageous to us in the long term. But, of course, that is all dependent on the data we show in the pivotal trials. Operator: I am showing no further questions in the queue at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may now disconnect. Everyone have a great day.
Operator: Good morning. And welcome to Orion Group Holdings, Inc. Full Year 2025 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Margaret Boyce, Investor Relations for Orion Group Holdings, Inc. Please go ahead. Margaret Boyce: Thank you, operator, and thank you all for joining us today to discuss Orion Group Holdings, Inc. full year 2025 financial results. We issued our earnings release after the market last night. It is available in the Investor Relations section of our site at oriongroupholdingsinc.com. I am here today with Travis J. Boone, Chief Executive Officer of Orion Group Holdings, Inc., and Alison G. Vasquez, Chief Financial Officer. On today's call, management will provide prepared remarks and then we will open up the call for your questions. Before we begin, I would like to remind you that today's comments will include forward-looking statements under the federal securities laws. Forward-looking statements are identified by words such as will, be, intend, believe, expect, anticipate, or other comparable words and phrases. Statements that are not historical facts are forward-looking statements. Our actual financial condition and results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of the factors that could cause our results to differ materially from these forward-looking statements are contained in our SEC filings, including our reports on Form 10-Q and 10-Ks. With that, I will turn the call over to Travis. Travis, please go ahead. Travis J. Boone: Thank you, Margaret. Good morning, everyone. Thank you for joining us today to discuss our 2025 results and 2026 guidance. Before we begin, I want to acknowledge the ongoing conflict involving Iran and the Middle East. We extend our sincere appreciation to the men and women bravely serving our country. We recognize the situation remains very fluid, and we are actively monitoring developments and evaluating any potential impacts on our business and markets. Now on to my prepared remarks. 2025 was a year of strong operational execution and meaningful advancement of Orion Group Holdings, Inc.'s long-term strategic priorities. We drove both top- and bottom-line growth and generated good free cash flow. Across the organization, our team delivered with predictable excellence, executing projects safely and profitably, strengthening our balance sheet, and taking important strategic steps that position our company for continued growth ahead. Over the past several years, we have been very clear about what we set out to do: improve execution, strengthen margins, professionalize the organization, and build a platform capable of capturing the significant opportunities across mission-critical marine infrastructure, defense, and concrete construction. In 2025, we translated that strategy into results. Importantly, we took decisive strategic actions that advanced our long-term growth plan. In December, we closed a new $120,000,000 senior credit facility that improves our liquidity, lowers our cost of capital, and provides flexibility to support both organic growth and accretive acquisitions. We also purchased a derrick barge in December to further increase capacity and execution flexibility. As many of you are aware, we have been on the hunt for a large Jones Act derrick barge that will enable our team to pursue a broader range of marine and defense-related work. The barge is currently undergoing some refurbishments, and we expect to deploy it into our operations later this year. Last month, we completed the acquisition of J. E. McAmus. The transaction greatly enhances our marine platform, particularly in complex jetty and breakwater construction where McCamis has deep, proven expertise. Their strong Pacific footprint, experienced workforce, and high-quality equipment fleet expand our ability to execute large, technically demanding projects. Integration is well underway and we are very encouraged by the strong cultural alignment and the collaboration we are seeing across the combined organization contracts awarded to McKamis over the last several weeks. In 2025, we consolidated our Houston footprint into our new headquarters office, implemented a modern project management platform, favorably settled multiple litigation matters, and monetized non-strategic real estate. Collectively, these deliberate actions improve our readiness for the next wave of large-scale, mission-critical marine and concrete infrastructure opportunities and reflect tangible progress for our strategic plan. While most aspects of our performance met or exceeded expectations in 2025, backlog was the one area where results were not as we anticipated. Even though our win rate in 2025 improved over 2024, for the year, we booked just over $763,000,000 in new contracts and change orders across the company, which represented a 0.9x book-to-bill. Customer decisions moved to the right, primarily due to tariff-related uncertainty in the private sector at the beginning of the year, followed by the prolonged U.S. Government shutdown later in the year, which delayed public sector bidding and awards. Importantly, we believe this is only a timing issue, with the work simply moving to the right as opposed to going away. We remain confident in our strong demand outlook, which is supported by the tailwinds we are experiencing across our markets. In addition, recent developments in the Middle East may accelerate the government to approve additional defense funding. We remain bullish on our backlog trajectory and long-term growth outlook, with a vibrant, growing pipeline that is currently at $23,000,000,000, which includes the J. E. McAmus pipeline of $1,400,000,000. Our marine opportunity pipeline increased $3,000,000,000, or 21% sequentially, to over $19,400,000,000 as of December 31. This does not include the McAimis acquisition, which we closed on in February. This growth reflects building demand and urgency across both public and private sector clients, and we are pleased with the 2026 funding for the Department of War Pacific Operations. Across our operating regions, we have a healthy volume of opportunities expected to be awarded throughout the year for clients spending in the U.S. Navy, the Coast Guard, regional port authorities, state departments of transportation, and private energy and chemical clients. Moving on to concrete. Our opportunity pipeline grew to over $2,400,000,000 at the 2025. Over the last several years, our team has built a strong and expanding position in data centers and the mission-critical construction market. The team produced good bookings throughout 2025, increasing year-over-year backlog by 10% with recent awards spanning data centers and other commercial structures. Our expansion into Florida and Arizona is paying dividends, fueled by a growing project pipeline and solid execution. I would like to drill down into our data center work, a real highlight in our concrete business that is improving literally by the day. I spent a good amount of time with the team last week and let me tell you, they are killing it. Today, our data center count stands at 46 projects, either completed or in progress across Texas, Iowa, and Arizona. We are seeing a shift toward larger campus-style developments for which execution and schedule certainty reign supreme. And our team has earned an outstanding reputation as a reliable delivery partner on mission-critical programs. In addition to construction of the buildings and foundations, we are increasingly engaging with key clients earlier to address constructability concerns and to implement targeted design improvements. To support these strategies, we have recently expanded into site civil and earthwork to strengthen execution certainty for our clients and also to broaden Orion Group Holdings, Inc.'s scope of services. We expect to see data centers contribute even more significantly to our concrete business this year, with some large opportunities developing in our markets. In closing, as I reflect on the year, I am excited about the deliberate execution of our strategic priorities buoyed by building momentum in our key end markets. With a $23,000,000,000 pipeline inclusive of Mecamis, a healthy balance sheet, and the best client-centered execution team in the business, we have an excellent runway for 2026 and beyond. I will now turn the call over to Alison to talk through our financial results and our 2026 guidance. Alison? Alison G. Vasquez: Thanks, Travis. We were pleased with the financial and operational progress we delivered this year, reflecting disciplined execution across the organization and continued focus on profitable growth, cash generation, and balance sheet health. For the full year 2025, revenue increased to $852,000,000, operating income to $15,000,000, adjusted EBITDA to $45,000,000, and adjusted EPS to $0.25 per share. I am also very pleased to report that we generated full-year operating cash flow of $28,000,000 and free cash flow of $14,000,000. Across all metrics, these results were a notable improvement over last year. From a segment perspective, in 2025, Marine delivered $545,000,000 of revenue, a 4.5% annual growth, and more than doubled its adjusted EBITDA to $56,000,000 for the year. This represents a 10% adjusted EBITDA margin compared to about 5% in 2024. The improvement in adjusted EBITDA was driven by favorable revenue mix, excellent execution, favorable equipment utilization, and positive project closeouts. For reference, Marine's contribution adjusted EBITDA margin for the year was 15%. In 2025, Concrete revenues increased 12% annually to $307,000,000, and Concrete reported an $11,000,000 loss in adjusted EBITDA. The reported adjusted EBITDA loss is primarily attributable to the impact of corporate allocations in 2025 and favorable project closeout benefits in 2024 that did not reoccur this year. Concrete's contribution adjusted EBITDA margin for the year, excluding corporate, was 4.5%. To provide increased transparency on segment operating margins, we plan to update our reportable segments beginning in 2026. Specifically, we plan to break out corporate expenses separately as a non-operating segment and will no longer allocate those costs to Marine and Concrete for external reporting purposes. This change is intended to increase transparency of our operating segments' results. Moving on to the balance sheet. As many of you are well aware, late in the fourth quarter, we entered into a five-year $120,000,000 credit agreement with UMB Bank. This facility meaningfully improves our liquidity, reduces borrowing costs, extends maturity by two years, and positions the balance sheet to fund future investments. It includes a $60,000,000 revolving line of credit, a $20,000,000 equipment term loan facility, and a $40,000,000 M&A term loan. It also includes an additional $25,000,000 uncommitted accordion to fund future growth. The UMB facility refinanced and replaced our previous $88,000,000 credit agreement, which was scheduled to mature in May 2028. Borrowings under the UMB credit facility bear interest at a rate of SOFR plus 2.5% to 3%, a 40% reduction in our borrowing cost compared to the prior credit agreement. A big shout out to our treasury and legal teams for getting this across the line. In connection with this refinancing, we paid off our $23,000,000 term loan and ended the year with net debt of just about $6,000,000. I would like to point out that subsequent to year-end, in February, we increased our senior borrowings by $47,000,000 to fund the McCanis acquisition. I will wrap up with our guidance update for 2026. We are very pleased to provide our full year 2026 guidance as follows: revenue in the range of $900,000,000 to $950,000,000, a 9% increase from 2025 at the midpoint; adjusted EBITDA in the range of $54,000,000 to $58,000,000, a 24% increase from 2025 at the midpoint; adjusted EPS in the range of $0.36 to $0.42, a 56% increase from 2025 at the midpoint; and capital expenditures in the range of $25,000,000 to $35,000,000, consistent with last year. That is it for me. Back to you, Travis. Travis J. Boone: Thank you, Alison. We are very proud of what we accomplished in 2025, and we view this year as a bridge, not a destination. Over the past twelve months, our operations team executed projects safely while growing revenues and adjusted EBITDA. Meanwhile, our corporate team sold the East West Jones property, restructured our credit facility, purchased the derrick barge, and acquired J. E. McAmus. None of this progress would have been possible without the hard work, dedication, and commitment of our people, and I want to thank them for their outstanding efforts. With a strong operating platform, expanded capabilities, and favorable market tailwinds, we are excited about the opportunities ahead and believe Orion Group Holdings, Inc. is well positioned as we look to capture more work and continue to execute for our employees, clients, and shareholders in 2026 and beyond. We will now open for questions. Thank you. We will now begin the question and answer session. The first question will come from Tomo Sano with JPMorgan. Please go ahead. Tomo Sano: Hi, good morning everyone. You talked about some of the delay of the revenue recognitions for awarded projects and could you talk about the impact your reported sales and margin in Q4? And could you specify which segments or projects experienced that delay and quantify the revenue and margins impact in 2026, please? Thank you. Alison G. Vasquez: Sure, Tomo. I will start, and Travis, feel free to add in. From a Q4 perspective, the fourth quarter came in generally in line with what we expected. We did not see a lot of softness in the quarter, and it was generally in line with what we were targeting and the guidance that we had set out for the full year. I will say that things do typically, in construction, move around a bit in terms of timing and cadence. You probably saw some of that in terms of margin profiles for the individual segments. But from an overall perspective, things came in in line, including from a corporate perspective. There were a few opportunities that— Travis J. Boone: That split out in Q4 that we were pursuing, but that is more on the pipeline side of things. Tomo Sano: Yep. Thank you. So could I double click on your commentary about the margins? Alison, if you could talk about the 2026 outlook by segment in terms of the margin expansions from 2025 to 2026? Alison G. Vasquez: Sure. I would be happy to. We are continuing to expect that we will have modest margin expansion across the business, both from the favorable impacts of blending McCamis into the Marine business. As you probably well recall, McCamus operates at a meaningfully higher margin than the rest of Orion Group Holdings, Inc., so we are expecting to see some favorable blend associated with that acquisition and the incorporation of their results. And then from a Concrete perspective, we do expect that Concrete will deliver margins in the mid-single digit for the year. In 2025, Concrete delivered margins of right around 4.5%, and we do expect to nudge that up in 2026 just as a function of some favorable demand signals that we are seeing in terms of the work that we are bidding on, the work that we are winning and bringing into backlog, as well as just continued growth and scale, which benefits our Concrete business pretty meaningfully. Tomo Sano: Thank you. If I may squeeze one more on data centers, Travis, you talked about data centers. Could you quantify the impact in 2026, in terms of the revenue compositions as well as some competitive advantages in data center projects for Orion Group Holdings, Inc., please? Travis J. Boone: I am not sure if I am ready to point to the fence yet on where we are going to land with data centers. As Alison just mentioned, we are seeing a large amount of opportunities that are lining up well with our capabilities and relationships. We have started doing site civil work on some of these data centers, which has been very well received, and we are doing well with that work. I think that will expand and continue. And I think we are going to keep seeing just a large amount of data center work happening. Right now, it is about 40% of our Concrete business. I expect that to probably go up a little next year. Tomo Sano: Thank you. I appreciate it. Travis J. Boone: The next question will come from Aaron Michael Spychalla with Craig-Hallum. Please go ahead. Aaron Michael Spychalla: Yes, good morning, Travis and Alison. Thanks for taking the questions. Maybe first for me, just on the pipeline, can you talk a little bit more about that? It sounds like the expansion is pretty broad-based. Any thoughts on kind of timeline, conversion to orders? I know you have had a slide that kind of has laid out timing potential there. And then just maybe talk about the kind of market and margins you are seeing—quotes and kind of backlog-wise? And then, you know, outside of McCamish, on margins as you are going to bid projects, how is that looking? Travis J. Boone: Yeah. So the pipeline has expanded. Some of that has been because things have slid, right? So it is kind of building, but there is also some things sliding, which makes it look like it is getting even bigger. But we have quite a few near-term opportunities, as in 2026, that are $100,000,000-plus projects. More than a dozen very real opportunities that are over $100,000,000 in size, which gives us a lot of confidence even though our backlog is down. We are one project win away from the backlog being in good shape. So we are not worried. We are bidding projects in the near term here that we feel good about. With our Marine business, and our Concrete business pipeline is growing and looking really strong. As you may recall, our Concrete pipeline is typically fairly small because there is a lot of book-and-burn, and it is private sector opportunities which are not super visible long in advance. So we are excited to see the Concrete pipeline creeping up, as well as the Marine pipeline continuing to expand, and then we added in McCamis that gives us even more opportunities to pursue. On the McKayman side of things, nothing has changed as far as the margins, bid margins, and things like that. They are going to continue pursuing projects as they have and— Alison G. Vasquez: And then on the rest of the business— Travis J. Boone: The rest of the business looks good. We are not seeing any downturns. In fact, I would say more the opposite in several of our markets. Aaron Michael Spychalla: Good. And then, you know, maybe second, on the data center side of things, you kind of talked about an expansion—site and civil and earthwork. Any thoughts high level what that means for maybe average project size or how quickly these projects can continue to turn with that dynamic? Travis J. Boone: Probably not going to give too much information just for competitive reasons, but I think it depends on where the data center is and how much infrastructure and dirt work needs to be put in before the concrete and foundations happen. There can be fairly significant amounts of work that go into that, and it gives us something else to sell to our customers. And as many of them are shifting to bigger campuses, sometimes those get to be much larger. Even though it may be a really large data center, they kind of go a little piece at a time—one little piece and another little piece—and then you look back six months later and you have done a ton of work over a period of time. So these things turn from a $500,000 task order, and next thing you know, you have done $50,000,000 worth of work—a little at a time, but very quick. Alison G. Vasquez: Yeah, and I think the other important thing there is, because our team has such a high level of credibility in this really critical aspect on the critical path of these projects in terms of building the structure—the infrastructure to support all the really important internal things—we are being engaged earlier in terms of some of the constructability concerns and the things that we have seen over the now 46-and-counting data centers or campuses that we have worked on. Incorporating those lessons for our clients is a really valuable level of expertise that we bring to the table, which means we become a trusted partner in this aspect of the building and the construction. So it is a pretty exciting time. My hat is off to that team who built very strong relationships with a number of key players. Aaron Michael Spychalla: That sounds great. Thanks for taking the questions. I will turn it over. Alison G. Vasquez: Thanks, Aaron. Travis J. Boone: Next question will come from Gerry Sweeney with ROTH Capital. Please go ahead. Alison G. Vasquez: Good morning, Gerry. Travis J. Boone: Hi, Gerry. Gerry Sweeney: Just a couple of follow-up questions maybe, but looking at the Marine side, obviously, pipeline is growing, you said some of the projects pushed to the right per se. But are you hearing any—or do you have any anecdotal commentary on maybe when some of these projects may come to fruition? Obviously, they are quite large, complicated. We have had a government shutdown, and then we have, you know, escalating in the Middle East. But all that said and done, just curious as to maybe some of the anecdotal items that you are hearing on those opportunities. Travis J. Boone: We are bidding a nice project this week. There are things moving forward now. There is not a single theme for why they moved—different reasons in different cases—but they are just shifting to the right. It is not a never-ending shift. They are actually coming to roost at some point, like the one I just mentioned that was originally supposed to be last year and we are bidding it this week. We are bidding quite a few jobs in the next six months—pretty nice ones—along with the normal run-of-the-mill projects that we always go after. I do not know if I answered your question, but— Gerry Sweeney: Yeah. Was talking to you. Yeah. Sorry. Go ahead. Alison G. Vasquez: I would just add, Gerry, that as we look at the pipeline, it continues to be very robust. We continue to have good line of sight into $8,500,000,000 of opportunities that we expect to be awarded in 2026. That is pretty normal. We have seen some clients really engage in a more meaningful way, which to us signals that decisions are likely going to be made in the near term. The pipeline sets up to be probably about a 40/60 split in terms of awards in the first half versus the second half, which is pretty normal—there is usually a spike in the federal government’s third fiscal quarter. We also often talk about the number of opportunities where we have provided all information and are just awaiting award from the client, and that number continues to sit at right around $1,000,000,000. That is a little bit higher than normative, but it has been consistently at that $1,000,000,000 mark throughout 2025 and continues to be around $1,000,000,000 now. That might just be the new norm in terms of holding the pipeline a little longer. We are seeing some awards, some clients moving and being more active. Gerry Sweeney: Gotcha. And at some point, that building kind of breaks loose, which is positive, obviously. Right? So— Travis J. Boone: That is right. Gerry Sweeney: Okay. That is it for me. I appreciate it. Thanks. Alison G. Vasquez: Thanks, Gerry. Travis J. Boone: The next question will come from Alexander Rygiel with Texas Capital. Please go ahead. Alexander Rygiel: Travis, your historical win rate on bids is sort of in that mid-teens range. Is there any reason to believe that historical win rate will be any different going forward? Travis J. Boone: No. We saw that win rate tick up between '24 and '25. Even though our backlog was down, our win rate was up, which tells you that things were sliding. We have seen it head in the right direction by a percent or two. I do not expect it to change much. It might continue to go up a little, but I do not expect any large jump up or down. We like to be in that 15% to 20% win rate sort of range, and that is where we are. We feel pretty good about it. Alexander Rygiel: And then, as it relates to your adjusted EBITDA guidance of $54,000,000 to $58,000,000, can you bridge that delta from the $45,000,000 you just reported and help us to understand what is organic versus inorganic? And as it relates to the organic, how that is broken out by segment? Alison G. Vasquez: Sure. I will give some high-level commentary. We are always gearing the business toward what we view as good organic growth—first and foremost investing to position the company for organic growth. Organic growth in 2026 is good; stepping back, it is probably in the upper single- to low double-digit range from an organic perspective, just because some opportunities are moving a bit to the right, specifically in the Marine business. We do think that Concrete will grow very favorably in 2026. We have signals that that is happening, and that is real. For Marine, those opportunities take time to get through the pipeline and the client’s process to bring them to market and ultimately get awarded. Some of those we expected in '26 have moved a bit to the right. That said, we do expect our Marine business to continue to grow in 2026. Will it be at the dynamic growth rates we anticipate with many things coming to market in '26 and '27? You will probably see that over the midterm, but that is not built into our 2026 guidance today. From a McKamath perspective, we have good line of sight into what we expect they will deliver, which is right in line with what we set out in the call back in February. They come with a highly qualified, reputable, credible group of people—a phenomenal team and leadership organization. We are very excited about bringing them into the portfolio and about some of the projects they have won recently. They continue to perform well, and we will look forward to bringing them into more of our opportunities and projects to make our pursuit teams even stronger as we look ahead. Alexander Rygiel: Very helpful. And then the outlook for backlog near term—I get a sense it is probably flattish to maybe trending a little bit down in the first quarter, but you expect a strong rebound in the third and fourth quarters. Is that a fair conclusion? Alison G. Vasquez: From a backlog perspective, we are gearing the organization around a book-to-bill that is greater than one. Our objective is to always be booking more than we are burning. Quarter to quarter, it is hard to predict backlog—it moves around based on burn, operational cadence, and what gets awarded within the quarter. From a full-year perspective, we expect to deliver good bookings that will elevate backlog balances. I will also say from a Concrete perspective, and from a dredging perspective as well, those businesses have a very quick book-to-burn, so they may have phenomenal years, but you may not see a lot of that manifested in the backlog at quarter-ends or year-end because of the amount of book-and-burn projects. Are we targeting elevated backlog through the year? Yes, absolutely, and we will track that through book-to-bill and how the organization is delivering on that. Alexander Rygiel: Thank you. Alison G. Vasquez: Thank you. Operator: The next question will come from Liam Burke with B. Riley Securities. Please go ahead. Alison G. Vasquez: Good morning, Liam. Travis J. Boone: Good morning. Liam Burke: Travis, you talked about closing on the derrick in late 2025. It is a fairly significant capital commitment—how quickly do you anticipate that investment turning into some sort of measurable return? Travis J. Boone: We have got some work being done on it for the next, let us say, six to eight months. Once it is in the condition and ready to go, we will get it busy and get it working somewhere in our business. As far as payback, we think we got a pretty good price on it, so I do not think it is going to be a long time to get a return on the investment. Liam Burke: Great. Thank you. And on the M&A front, the McCamish was opportunistic. Obviously, you do not have a pipeline of opportunistic acquisitions, but what does the acquisition pipeline look like? Travis J. Boone: It is a pretty active market out there at the moment. Lots of different things happening. It seems like acquisitions have really gotten pretty strong across all sectors—lots of different acquisitions and activity happening. We saw Great Lakes just recently get acquired and go private, and just lots of things happening out there that will potentially give us opportunities to do more in the next year or so. Liam Burke: Thank you, Travis. Operator: This concludes our question and answer session. I would like to turn the conference back over to Travis Boone for any closing remarks. Travis J. Boone: Thank you all for joining us today. We look forward to talking to you again soon. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Greetings and welcome to Fuel Tech, Inc.'s 2025 Fourth Quarter and Full Year Conference Call and Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Devin Sullivan, Managing Director at The Equity Group. Thank you. You may begin. Devin Sullivan: Thank you, Rob. Good morning, everyone, and thank you for joining us today. Yesterday, after the close, we issued a press release, a copy of which is available at the company's website, www.ftek.com. Our speakers for today will be Vincent J. Arnone, Chairman, President and Chief Executive Officer, and Ellen T. Albrecht, the company's Chief Financial Officer. After prepared remarks, we will open the call for questions from our analysts and investors. Before turning things over to Vince, I would like to remind everyone that matters discussed on this call, except for historical information, are forward-looking statements as in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and reflect Fuel Tech, Inc.'s current expectations regarding future growth, results of operations, cash flows, performance, and business prospects and opportunities, as well as assumptions made by and information currently available to our company's management. Fuel Tech, Inc. has tried to identify forward-looking statements by using words such as anticipate, believe, plan, expect, estimate, intend, will, and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech, Inc. and are subject to various risks, uncertainties, and factors including, but not limited to, those discussed in Fuel Tech, Inc.'s Annual Report on Form 10-K’s Item 1A under the caption of Risk Factors and subsequent filings under the 1934 Act, as amended, which could cause Fuel Tech, Inc.'s actual growth, results of operations, financial condition, cash flows, performance, and business prospects and opportunities to differ materially from those expressed in or implied by these statements. Fuel Tech, Inc. undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the company's filings with the SEC. With that said, I would now like to turn the call over to Vincent J. Arnone. Vince, please go ahead. Vincent J. Arnone: Thank you, Devin. Good morning, and I would like to thank everyone joining us on the call today. 2025 was a year of multiple achievements for Fuel Tech, Inc., marked by an expanded opportunity set in our Air Pollution Control business segment driven largely by anticipated growth in data center development and construction, a resurgence in revenue for our FUEL CHEM operations, revenues for the year exceeded our expectations and reached their highest levels since 2018, and tangible progress at our Dissolved Gas Infusion business. We maintained a strong financial position with cash, cash equivalents, and investments of nearly $32,000,000 at year end and no debt. Our FUEL CHEM segment ended an already strong year on a high note. Across the country, the useful life of coal-fired units is being extended to satisfy growing energy demand, and many of these units were dispatched at levels that have not been realized in several years. Our results for the FUEL CHEM segment benefited from this phenomenon, in particular for our legacy units. In addition, 2025 results were favorably impacted by the full year performance of a U.S. commercial unit that we added late in 2024 and from a new U.S. customer that is currently operating with us under a six-month commercially priced demonstration program that commenced in 2025. As we have discussed previously, the annual revenue potential from this commercial opportunity, should it convert from a demonstration, is expected to be approximately $2,500,000 to $3,000,000 based on the customer running the program full time, with the revenue expected to generate historic FUEL CHEM gross margins. I want to share a bit of additional color regarding our FUEL CHEM demonstration program. This customer was interested in our program as a means to improve boiler availability and reliability, and to reduce maintenance downtime for offline boiler cleaning, in particular during periods of high power generation demand. This customer utilizes a source of coal that is high in sodium and is prone to extensive slagging and fouling. To date, the customer has realized a material reduction in downtime and maintenance costs due to a reduction in offline cleaning, which bodes well for a successful demonstration. Revenues generated by our APC segment rose in the fourth quarter but declined annually reflecting customer-driven delays and project award timing. We secured $8,800,000 of APC awards during 2025 from new and existing customers in the U.S., Europe, and Southeast Asia. Our near-term sales pipeline of APC contracts, exclusive of data center opportunities, is between $3,000,000 and $5,000,000. While we had hoped to close on these opportunities by year end, discussions remain active and we expect to close before the end of the current second quarter. Even with these delays, we ended the year with a consolidated APC segment backlog of $7,000,000, up from $6,200,000 at the end of 2024. As we announced last quarter, we expanded our APC portfolio through a small strategic acquisition of complementary intellectual property and customer-related assets from Walco Inc., a well-established environmental equipment and services company with several hundred project installations worldwide. As we continue to integrate WALCO's operations, we have been encouraged by the pace of project inquiries from their client base and others, including a number of near-term needs. The value proposition for us in acquiring WALCO was in securing these high-value assets at a modest price, strengthening our technology portfolio, and attracting a broader base of potential customers. This proposition seems to be playing out thus far. With respect to the data center opportunity, these facilities will potentially require emissions control solutions to mitigate their environmental footprint, comply with federal, state, and local regulations, and align with corporate sustainability mandates. Our sales pipeline for these opportunities remains strong and approximates $75,000,000 to $100,000,000 per project integrating our SCR technology with power generation sources. Please note that the value of the pollution control scope of supply represents a very small fraction of the estimated total AI infrastructure spend. I want to provide a little more information about our data center opportunity. First, think that we have been clear that any material near-term growth for our company will likely derive from our success in addressing this opportunity. As such, we have been, and continue to, devote substantial internal and external resources to position Fuel Tech, Inc. with data center developers, and turbine and engine providers, to deliver NOx reduction technologies as part of a data center's power generation platform. One point that I want to highlight is that Fuel Tech, Inc. is a subcontractor in the data center ecosystem. In all instances, we are a subcontractor to the data center integrator or to the turbine or engine OEM. This relationship limits our knowledge of the development of the data center opportunity, its funding, its phase of approval, and its timing. Our role remains the support and education of our direct customer regarding the design and delivery of a pollution control system that can best fit the application. This does not dilute the opportunity landscape or temper our enthusiasm in any way, but it does make providing specific insights with respect to the timing of awards more challenging. This is what we can currently share about the opportunity. At present, we are in various stages of participation in project opportunities with more than ten different data center integrators and turbine and engine OEMs, including some of the largest companies in the industry. All of these inquiries are for pollution control systems, primarily SCR, in support of the development of on-site power generation. The size of these projects runs the gamut, as little as two to five units per project to as many as 30 to 40 NOx reduction units, with pricing predominantly in the range of $1,000,000 to $2,500,000 per unit. Regarding timing, the earliest we expect any of these inquiries to convert to a commercial award based on our conversations with the various parties involved is Q2 2026, as the schedule requirements for at least two of the projects would necessitate the receipt of an award by then. The remainder of the inquiries will develop further as we move throughout the year. To the best of our knowledge, with just one exception, none of the inquiries that we are currently involved with have been awarded. More specifically, we are still very much in the running to capture our share of these opportunities, and we remain optimistic about our prospects for 2026. On the regulatory front, we have seen that the current administration is currently pursuing both the rollback of specific regulations that had been put in place previously and the implementation of new regulations that are less restrictive than those currently in place. Regarding the rollback of regulations, EPA announced the rescission of rules related to the reduction of greenhouse gases. Regulation of these emissions started in 2009 with the EPA endangerment finding based on a 2007 Supreme Court ruling. EPA has also announced the repeal of the 2024 mercury and air toxic standards for coal-fired units. It is important to note that both of these proposed rollbacks do not loosen the nitrogen oxide emissions reduction requirements for any sources and could potentially extend the life of some coal- and natural gas-fired units that may not have to reduce their emissions profile. We will take the opportunity, where applicable, to offer retrofit and maintenance solutions to accommodate the extensions of useful life. Now, regarding the implementation of new rules, earlier this year, EPA issued new source performance standards, also known as NSPS, for new gas turbines, which were published in the Federal Register on January 15. The NSPS was required per EPA consent decree with Sierra Club and the Environmental Defense Fund and were in response to the proposed rules that were issued in November 2024. A new category of gas turbines was created called temporary power turbines and is applicable to units below 85 megawatts installed to run for 24 months or less. These units will be required to achieve NOx levels of 25 ppm, which in some cases may not require SCR for all turbines. Turbines greater than 5 megawatts with high operating capacity will need to meet 15 ppm of NOx, which will likely require SCR, and turbines greater than 85 megawatts will need to get to 5 ppm NOx, which will require SCR in almost all cases. So what is the impact of the new regulation? First of all, several organizations including the Clean Air Task Force, Sierra Club, and the Environmental Defense Fund have filed a petition for reconsideration with the EPA, and the hard deadline to file a formal lawsuit challenging these amendments in the U.S. Court of Appeals for the D.C. Circuit is March 16. It is certain that lawsuits will be filed. And second, with this rule in place, power generation developers will need to decide how best to proceed with their pollution control solutions for their new sources of power generation. Based on the discussions that we have had with our potential client base, we are not aware of this new regulation having a significant negative impact on decision-making regarding the implementation of pollution controls. It is important to note that state-specific permitting requirements can vary from the new federal regulation. And it is also important to note that, outside of the NSPS requirements, the use of multiple gas turbines working together classify them as a major source for NOx. Major sources are governed by other regulations and are often required to meet more stringent NOx emissions which would require SCR. We continue to pursue additional new awards driven by industrial expansion globally and by state-specific regulatory requirements in the U.S. We are continuing to monitor the progress of the EPA's rule for large municipal waste combustion units. This rule reduces the nitrogen oxide emissions requirements for up to 150 large MWC units across the country. Fuel Tech, Inc. has had a long history of assisting this industry in meeting its compliance requirements, and we have had discussions with customers in this segment to support their compliance planning. The final rule is currently in the White House Office of Management and Budget and is expected to take effect before March, with NOx emission levels likely requiring advanced SNCR technology to meet compliance deadlines three years from the date of issue. Moving over to DGI. We are continuing the extended demonstration of the technology at a fish hatchery in the Western U.S., which remains on track to conclude in the second quarter of this year. The system is performing well, meeting customer expectations for the precise delivery of concentrated dissolved oxygen and generating positive results in terms of reduced operational costs and improved fish growth. A second trial that commenced at a municipal wastewater site in the Southeast U.S. was successfully completed in January and converted to a six-month rental contract that is expected to run through the beginning of the third quarter of this year. Our DGI system is delivering the designated volume of oxygen, and the client reports that odor-related complaints in the areas surrounding the plant have been dramatically reduced. We are currently in discussions with multiple other end markets of interest for DGI, including pulp and paper, food and beverage, petrochemical, and horticulture. We have been supported in these efforts with the addition of representative firms with end-market expertise. As we look ahead to 2026, we are optimistic about our potential financial outlook. Our FUEL CHEM business is expected to continue to perform well, driven by the performance of our base accounts and by the expectation that we convert another demonstration account to commercial operation. Our APC business development activities, including our standard opportunities, those associated with respect to the Walco acquisition, and potential tailwinds from data center opportunities, are at the highest level that we have experienced in several years. And regarding DGI, based on progress at our demonstrations, it is expected that we will have our first commercial contract in 2026. Overall, we expect that revenues for 2026 will exceed the level of 2025, with FUEL CHEM approximating 2025 revenues and APC exceeding 2025 performance, without considering the benefit of data center awards, which would be additive to the forecast. Before turning things over to Ellen, I want to thank the entire Fuel Tech, Inc. team for their dedication in advancing our strategic objectives and our shareholders for their patience and support. Now, I would like to turn the call over to Ellen for her comments on the financial results. Ellen, please go ahead. Thank you. Ellen T. Albrecht: Thank you, Vince, and good morning, everyone. I will start off today by reviewing our fourth quarter results. For the quarter, consolidated revenues rose 37% to $7,200,000 from $5,300,000 in the prior-year period, reflecting growth from both our APC and FUEL CHEM segment revenues. APC segment revenue increased 37% to $2,400,000 from $1,800,000, primarily related to timing of project completion. FUEL CHEM had a very strong quarter, generating a 37% increase in revenue to $4,900,000 from $3,500,000, reflecting contributions from our legacy portfolio and the six-month commercially priced demonstration program that commenced in early November. Consolidated gross margin for the fourth quarter rose to 45% of revenues from 42% in last year's fourth quarter, with APC and FUEL CHEM each producing higher margins for the quarter. FUEL CHEM gross margin increased to 46% from 45% in 2024 due to the increase in the revenue base. APC gross margin expanded significantly to 42% in the fourth quarter compared to 36% in the prior-year period as a result of project and product mix. Consolidated APC segment backlog on December 31, 2025 was $7,000,000, up from backlog of $6,200,000 on December 31, 2024. Backlog at 2025 included $3,400,000 of domestically delivered project backlog and $3,600,000 of foreign-delivered project backlog, compared to $1,900,000 of domestic-delivered project backlog and $4,300,000 of foreign-delivered project backlog at 2024. We expect that approximately $6,000,000 of current consolidated backlog will be recognized in the next twelve months. SG&A expenses were $4,200,000 in the fourth quarter compared to $3,900,000 in the prior-year period. As a percentage of revenue, SG&A expenses declined to 57% from 75%, reflecting higher consolidated revenue in the current period offset by the timing of certain expenditures. Research and development expenses for the fourth quarter rose to $504,000 from $405,000 in the same period a year ago, mainly attributed to our commercialization efforts for our DGI technology. Our operating loss narrowed to $1,400,000 compared to a loss of $2,100,000 in last year's fourth quarter, reflecting higher revenue and margin contributions from our operating segment. We continue to take advantage of the favorable interest rate environment and, as of December 31, 2025, have invested a majority of our $31,900,000 in held-to-maturity debt securities and money market funds. This generated $288,000 of interest income in the fourth quarter and $1,400,000 of interest income for 2025. Moving to the results for full year 2025. Consolidated revenue rose 6% to $26,700,000, in line with our most recent guidance provided in November. The increase in full year revenue was driven by a 28% rise in FUEL CHEM segment revenue to $17,800,000, exceeding our guidance for the year. This increase in revenue was partially offset by a decrease in APC segment revenue. Consolidated gross margin for 2025 rose to 46% from 42% in 2024, with higher margins for both the FUEL CHEM and APC operating segments. SG&A expenses for 2025 modestly increased to $14,100,000 from $13,800,000 in 2024, within the guidance range we provided at this time last year. The increase was mainly attributed to employee-related expenditures. As a percentage of revenue, SG&A decreased to 53% from 55%, reflecting higher consolidated revenue. For 2026, we expect SG&A expenses to increase modestly from those in 2025. Research and development expenses for the year were $2,000,000 for 2025, compared to $1,600,000 in 2024. As we move closer to fully commercializing our DGI segment technologies, in addition, we also continue to invest efforts related to our legacy technologies as necessary. Operating loss narrowed to $3,700,000 for 2025 compared to a loss of $4,700,000 in 2024, reflecting higher segment revenues and relatively flat total costs and expenses. Net loss for 2025 was $2,300,000, or $0.08 per diluted share, compared to a net loss of $1,900,000, or $0.06 per diluted share, in 2024. Adjusted EBITDA loss was $2,700,000 in 2025, compared to an adjusted EBITDA loss of $2,200,000 in 2024. Lastly, moving to the balance sheet. Financial condition remains very strong. As of December 31, total cash and cash equivalents, total cash and investments was $31,900,000, comprised of cash and cash equivalents of $11,900,000 and short- and long-term investments of $20,000,000. Net cash provided by operating activities was $3,000,000 for the year as compared to a use of total cash of $2,800,000 in the same period last year. Shares outstanding at quarter end were approximately 31,100,000, equating to cash per share of $1.03. Working capital was $25,700,000, or $0.83 per share. Stockholders' equity was $40,000,000, or $1.29 per share, and the company continues to have no outstanding debt. We remain fully confident in our ability to uphold a strong financial condition and continue funding both short- and long-term growth initiatives across FUEL CHEM, APC, and DGI. I will now turn the call back over to Vince. Vincent J. Arnone: Thanks very much, Ellen. Operator, let us please go ahead and open the line for questions. Operator: Thank you. At this time, we will be conducting a question-and-answer session. Before pressing the star keys. Our first question comes from Sameer Joshi with H.C. Wainwright. Please proceed with your question. Sameer S. Joshi: Hey, good morning, Vince, Ellen. Thanks for taking my call. Good morning. So first, the data center opportunity should be significant for the company. You mentioned you are reliant on these integrators or OEMs for getting the final order. My question is, are you already designed in with these participants or is there further sort of competition once those guys get the orders from data center? Vincent J. Arnone: I cannot say that we are specifically designed in for these operators at this point in time, Sameer. What we are doing is, we would obviously like to be at the point whereby we are designed in with an integrator or operator that is looking to build several sites. But right now, at the beginning phase with some of these operators, what we are doing is establishing ourselves as a potential trusted partner to be able to do the design pollution control system for them. A lot of the parties that are coming to us are not necessarily very familiar with pollution control requirements. So we are definitely playing an education role as we work with some of these parties at this point in time. But we are hoping that the upfront time that I mentioned that we are investing with these opportunities is going to pay off a little bit longer term as these projects actually do come through their evolution and are ultimately awarded. So that is where we stand today. And the situation I would say is slightly different across the different parties that we are dealing with. Sameer S. Joshi: Got it. Understood. And I do not want to conflate this, but the requirements for the less than 85 megawatt plants and short term working less than 24 months, does that in any way affect or impact these data center opportunities? I just do not want to conflate those, but is there any relation? Vincent J. Arnone: Right. Ultimately, on a long-term basis, should not have an impact, Sameer, because most of the projects that we read about, most of the projects that we are having discussions about, are intended to be long-term power generation solutions for that particular data center, right? It would only be in the instance whereby a potential operator or integrator needed that to meet perhaps a very specific startup date and they had the ability to have some power generation equipment up and running for a short period of time to meet that startup date. Again, perhaps, right? But again, from our perspective, the people and party that we are dealing with, they are looking at long-term power generation solutions that are indeed not temporary in nature because they are looking to support that data center long term, not just for less than 24 months. Sameer S. Joshi: Got it. Sticking to sort of regulatory environment, with the PPA declaring carbon dioxide not a pollutant and you talked about the mercury's doctrines, and it indirectly helping you because it does not require NOx reductions, and so existing plants may have extended life because of the other reductions in requirement or loosening of requirement. Are you already seeing any increased activity as a result of this where some of the plans that may be on the way to shut down are now saying that, hey, we can continue to function, and reaching out to you? Vincent J. Arnone: At this point in time, Sameer, it is a little bit too early to assess the impact of those relatively recent rollbacks. We just wanted to point out very specifically that those rollbacks do not impact Fuel Tech, Inc.'s opportunity to capture prospective awards that are specifically related to nitrogen oxide reduction opportunities. So we just want to ensure that there is not confusion related to those rollbacks which are not going to impact Fuel Tech, Inc. business opportunities. Longer term, those rollbacks, they could indeed have the impact of possibly extending the useful lives of some facilities. Sameer S. Joshi: Got it. Moving to FUEL CHEM, it is nice to see the six-month sort of trial order and likely because they are seeing the results likely to convert. Are there more such potential customers that you have in the pipeline or are at least talking to in terms of getting because each additional customer could bring two plus million or almost four plus million in orders annual recurring revenues? Vincent J. Arnone: So at this point in time, yes, we are very optimistic about converting this demonstration to a commercial contract. Hopefully, that will bode well for us here in 2026. But incrementally, as I have said on prior conference calls, the coal-fired base-loaded unit, just call it phenomenon, it is not as robust as it used to be a decade or fifteen years ago. So many coal-fired plants being shut down. We are looking for these pockets of opportunity whereby we can, on an incremental basis, add these one-off opportunities for us. Sameer S. Joshi: Okay. Vincent J. Arnone: And we need to be a little bit careful about saying that each unit is going to be between $2,000,000 and $3,000,000 per opportunity in revenue, because it does vary by unit size and the specific runtime of that unit. I just wanted to qualify that. So to specifically answer your question, we do not have anything of what I would call specifically that we are looking for imminent demonstration, but we are looking at some other opportunities that could be for us, and perhaps with the same body of plants that we are doing business with today, to add another unit or two at plant sites. So there is opportunity there, but again, as I have said previously, we have not looked at FUEL CHEM as being what I would call a material growth opportunity for the past several years. What we are seeing here in the recent term, we are very, very pleased with. We finished 2025 at just under $18,000,000 revenue, which if you would have asked me that question five years ago, I would have said it would not have been possible. So we are very pleased with where we are. And there is some, I will call it, moderate upside opportunity. Opportunity, but it is moderate. Sameer S. Joshi: I am guessing this outlook for 2026 where FUEL CHEM is expected to be at same level as 2025 does not include this incremental opportunity that may convert into, like, from trial to full time. Vincent J. Arnone: Yes. We are looking at it right now very, very conservatively, Sameer, without knowing exactly what the outcome is going to be as we sit here today. We will have more information to share in early May when we have our first quarter conference call. Sameer S. Joshi: Yes. That is fair. And just squeezing in one last one on DGI. It seems this municipal wastewater is working well as well as the fishery seems to be working well. Should we expect revenues from DGI during 2026? Because on the outlook, you did not mention any of that. Vincent J. Arnone: Right. So we are going to recognize, hey, a small dollar value of revenue from the rental of the system at the municipality. That is only $10,000 per month. As we look at the remainder of the year, we are hoping to have a system sale between now and the 2026 of one of our DGI units. It is not going to be material to our overall results. But what is important regarding that activity is it sets the platform for us to be able to further and go ahead and discuss a success story specifically with the end markets that we are looking to chase. And we have not had the opportunity to do that yet. So that moment is extremely critical for us as we look to further develop and commercialize DGI. Sameer S. Joshi: Thanks, Vince, for taking my questions. Congrats on a strong year and good luck. Vincent J. Arnone: Thanks, Sameer. Operator: Our next question comes from Adam Waldo with Lismore Partners. Your line is now live. Adam Waldo: Good day, Vince. I hope you can hear me okay. Your stock trades at $1.20 to $1.25 a share. You have about a dollar a share in cash on your balance sheet. You have reasonable prospect of being cash flow positive in 2026, and you articulate a sizable new business pipeline in the data center area. I would argue that with your stock trading where it is, the market does not believe you are going to close any of that pipeline. You are very optimistic that you can. Over the balance of 2026, and you were optimistic in the 2025 as well. The timing of these projects is very hard to predict. What gives you so much confidence and optimism that you are going to close, you know, a sizable number of data center projects over the next twelve to eighteen months. Vincent J. Arnone: Adam, thanks very much for the question. Yes, you are correct. I mean, we are in a position whereby, yes, we are trading just a little bit above cash value today. We as a company have not been able to go ahead and bring to the table any material award as of yet as to the data center opportunity. So in response to your question, my level of confidence lies in a couple of areas. First of all, as we have seen this opportunity develop, and literally over the past nine to twelve months because it is still what I would call a new opportunity and it is one that we do not believe for Fuel Tech, Inc. is a short-term opportunity, it is one that is going to develop over the next five to ten years. But what we have seen over this past nine to twelve months is more and more players, if you will—players defined as data center integrators, parties that have access to power generation equipment in the form of turbines or engines—and just then the OEMs of those turbines or engines themselves. There have been more inquiries come our way literally over this past three months than we saw come our way over the initial six to nine months, relative to parties seeking to take advantage of the opportunity to provide a power generation solution to the data centers that are going to be built out. Okay. So point number one is just the volume of activity, the different types of parties and players that are coming to the table, and also what I would call the caliber of the parties that we are dealing with as well, in terms of them being in some cases multinational organizations with scale and capability, that give us the confidence that at some point in time here, just given the demand, that Fuel Tech, Inc.'s products and solutions are going to be pulled into this ultimate data center solution. Okay. So number one, the volume of activity gives me a very high level of confidence. Point number two is my confidence in the Fuel Tech, Inc. team to be able to go ahead and basically assimilate all of the inquiries that have been coming our way and determine our best path with these data center integrators and/or engine or turbine suppliers to be able to position us well with those organizations and give these organizations the confidence that we, as Fuel Tech, Inc., can deliver on our air pollution control solution for them. So it is twofold. And yes, I am optimistic. I mean, the level of inquiry is indeed extraordinary. And so it is up to us to capitalize on it, and we are doing everything that we can to do so at this point in time. I hope that answers your question. Adam Waldo: Thank you very much. Vincent J. Arnone: Thank you, Adam. Operator: We have reached the end of the question-and-answer session. I would now like to turn the call back over to Vincent J. Arnone for closing comments. Vincent J. Arnone: Thank you, operator. In closing, I want to thank, obviously, our Fuel Tech, Inc. team for their continued support and dedication. Thanks to all of our stakeholders, again, for your patience. We are doing what we can to create shareholder value. And we have an opportunity landscape in front of us today that we know we need to capitalize on, and we are going to do everything that we can. Thanks to our Board for support as well. With that, I want to wish everyone a good day, and thanks for participating in the conference call. Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
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